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Told I owe back £4,500 overpaid tax credits!!

(15 Posts)
Solo2 Wed 14-Sep-11 12:59:39

Can anyone advise me please? I've just had a letter saying I must immediately pay back the above sum as this was overpaid 6 years ago to me shock. I no longer qualify for tax credits and every year that I DID qulaify, I'd get some standard letter saying they owed me £X and that this would be deducted from what I owed them for overpayments way back when.

I know that my income increased a while back (I'm self-employed) but can't at all remember ever being paid such a vast amount in overpayment 6 yrs ago.

My questions are: How can I check if they're right that I do indeed owe this amount at all? If I do, will they let me pay back over a number of years, interest free? Has anyone else had this sort of thing happen to them?

Curiousmama Wed 14-Sep-11 13:01:48

Have you rang the helpline? it's 0845 302 1429.

Just rang them myself I owe £532 and thought that was bad!

CogitoErgoSometimes Wed 14-Sep-11 15:09:27

I would either call or write to the Tax Credit offices and ask for a full account statement of all payments and receipts. Dispute the amounts that way. Have you kept the communications from them saying how much you owed each year and how much you were paying back?

PersonalClown Wed 14-Sep-11 15:16:14

If it was 6 years, I'd check with the CAB. I think the ruling is that if they haven't made contact in those 6 years about your debt, they can whistle for it.

PersonalClown Wed 14-Sep-11 15:21:25

Found this on Statue barred debts. HTH

Statute Barred
A debt is considered Statute Barred if a creditor has not contacted a debtor for a period of 6 years and no action has been taken on the account.

Although the debt is still legally acknowledged as being owed, the creditor is not able to take any legal action against the debtor in order to recover the debt. It is considered unfair if a creditor or debt collector misleads the debtor into believing the debt is still legally recoverable. It is also considered an unfair practice if the creditor or debt collector press for payment after the debtor has stated they will not be paying the money owed. This could amount to harassment contrary to Section 40(1) of the Administration of Justice Act 1970.

purpleturtle Wed 14-Sep-11 15:23:52

I'm not sure the statute barred stuff applies to Tax Credits, though, as Tax Credits do not fall under the Consumer Credit Act, do they?

First step has to be to ask for a breakdown of their calculation. Good luck!

lazymumofteenagesons Wed 14-Sep-11 15:26:20

Write to them asking for a full explanation of the overpayment saying that you are disputing the debt. They do not charge interest and only automatically deduct if you are still getting tax credits. While you are disputing it they won't proceed any further. If you do owe it you can arrange to pay in installements over a period of time depending on your circumstances.

CogitoErgoSometimes Wed 14-Sep-11 15:30:45

@personalclown... I think, if HMRC have written to the OP in the intervening 6 year period .... I'd get some standard letter saying they owed me £X and that this would be deducted from what I owed them for overpayments way back when. .. then they have been in contact and the debt is live.

PersonalClown Wed 14-Sep-11 15:35:26

Hmm true.. Just wondered if because they have said it but not done it, it might still be valid.

Ho hum. Worth a try. TC are bastards. I'm paying back £1000 from before Dp moved in because they take his earnings into account even though we weren't together.

I'm sure they pick random numbers out of the air.

RitaMorgan Wed 14-Sep-11 15:53:19

Definitely ask for everything in writing, copies of all correspondence with you in the last 6 years, and recordings of every phonecall you've made to them.

Solo2 Wed 14-Sep-11 17:33:37

Thanks everyone. Not good news. Spent hrs trying to get hold of someone on Tax Credit helpline and Debt line. In summary, they think they DID overpay me because of them being behind in paperwork, during the yr my twins went from childcare to preschool/school - hence my childcare costs reduced.

They say they'll send me the paperwork so I can check this but it'll take 2 weeks and to phone the Debt line to let them know so no further action is taken. the Debt line however said they're fed up with the Tax Credit Helpline claiming you can put a hold on a claim and if I don't set up a repayment plan NOW, legal action will be taken!

In shock really....I'ma single mum running my own business, solely reliant on my own income and times are hard right now (comparatively so).

I've got till Monday night to set up the repayment plan.....Apparently it makes no difference if the oevrpayment (if it's true) is 6 yrs or more ago as they apparently notified me and when I got paid Tax Credits (no longer do), each yr, instead of paying me, they took what they could have paid me and paid off some of this supposed debt.

Have no idea how such a huge amount could have been paid to me....just trying to absorb the news and will start looking into all my paperwork over the next few days.....

lazymumofteenagesons Wed 14-Sep-11 20:45:15

If you have the time go into your local CAB they deal with these constantly. If it was the fault of HMRC being behind in their paperwork then the overpayment can't be recovered.If you told them everything on time and they mucked out you should not need to pay back.

lazymumofteenagesons Wed 14-Sep-11 20:52:10

Have a look at this it could be useful :

www.adviceguide.org.uk/index/b_overpayment_of_tax_credits.pdf

Curiousmama Wed 14-Sep-11 22:33:57

shock Am so sorry for you. Hope CAB will help?

sleepevader Thu 15-Sep-11 12:23:06

Dont acknowledge debt til you have spoken to cab.

It could still be statue barred. It's contact from you that counts!

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