Tax Credits Overpayment

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I've NC'd for this and posted for traffic sorry!

I've received a letter from tax credits stating I have been overpaid by nearly £4k. It is correct from what I can make out. The only thing is it doesn't demand I pay them back it rather a we'll reduce your payments, however I'm no longer entitled to tax credits.

Anyone any experience of this? Will I get another letter demanding payment? Obviously I don't have £4000 to pay back!

Dreary. Did not fail to realise or ignore. I simply assumed that if I told the government my wage had increased and I was no longer entitled to receive as much as I was getting that they would make the adjustment. Was also working full time with two small children and had a bit of a breakdown which left me having to take medication and well......life was busy and hectic.
I know now not to trust the government and would rather never receive a penny of the money I am entitled to than have to go through the stress of it.

@NakedMum33and3rd call them back and speak to the payments team - tell them you are struggling to buy food and so on and can the payment be adjusted. When I spoke to them I owed several thousand and initially because I was on (for one blissful, extremely brief 12 months that did not continue I'm sorry to say period!) good money I had to pay about £200 a month but they were very clear to say if your income goes back down call us back and we will adjust it to what's affordable.

It's a bloody shit system isn't it. I mean I literally went through this rigmarole at least two or three times before I twigged that my calling them up and advising them of a new (lesser) salary was actually just never getting actioned. To then push people into possibly (aside from their mortgage) that biggest debt they've ever been in seems ludicrous, and to then have to staff and administrate an entire debt recovery system must cost millions. Totally idiotic.

Fwiw, I've found that the people you call first on the main tax credits number to have quite a brutal stance along the lines of "Well you've got to pay it back" but when you get through to the repayments plan people, they're at least it seems operating in some landscape of reality and on the couple of more recent dealings I had with them (couple of years ago now) they were really reasonable so don't be afraid to give it a go. If you have the original letter from when the agreement was set up it'll have the reference number and hopefully the correct number to call to get straight through to the repayments team thus bypassing the grumpy squad in the main section.

Sadly even if you tell them your income has changed Dreary they don't necessarily adjust your payments accordingly. Until you have an in depth conversation with them you aren't aware that their stance is to pay pay pay - then reclaim overpayments after - that's their policy. Setting an expectation with TV ads that you should ring up and inform about changes and when you do they've got literally no interest at all and it doesn't result in a payment alteration. Only you don't know that until you've had it happen to you possibly several times and the penny drops and you find out that this is how they operate. I actually fell into your camp too NakedMum - it's literally almost not worth the hassle for the incredible stress and anxiety it causes when you get a letter saying "You owe us £10k pay it now".

If people understood that they will continue to be paid the higher amount regardless of how often they update TC and to set aside anything they think might be 'too much' in readiness for the inevitable "you've had an overpayment" letter, then they'd have a fighting chance of managing it.

Also Dreary, the TC calculator is a joke because all it does it focus on the previous year's income - which is ludicrous, because you're going to be adjusted on your current year's income the next time they do their annual review so the past AND the current income situation are both equally relevant. So it's pretty impossible to work out what you should actually be getting paid and know whether you are being overpaid, underpaid or paid the exact right amount. More often than not if you run your current situation through the calculator, you get a totally different answer to what you're getting presently.

The calculator should know what you've been paid, know the previous year's income that payment was calculated on, allow you to submit an update each time your current income changes and know that the payment will immediately be adjusted. That would negate the need for all this debt recovery shenanigans which actually comes at the cost of the tax payer and is quite unnecessary and avoidable if the TC people would only set up a system that accommodates the very different working patterns people have these days rather than relentlessly pursuing the Ambrosia-like unrealistic view that everyone is a permanent employee on just about the self same salary every year.

@NakedMum33and3rd
Please call them back and tell them you cannot afford £300 a month. They know damn well if they took it to court the chances of them getting a payment plan for anything like that is miniscule. You should not be going without.

@drearydeardre
Then you are being nieve over how difficult and obscure tax credits are. I haven't had a change of circumtances that hasn't resulted in an overpayment. Always with some dingbat on the phone the tax credits office insisting that no that is definitely just an ajustment and not an overpayment even if you know it's an extra unexpected payment. One overpayment they actually doubled with NO explanation to either myself or the mp why either the first amount or the second amount was due just that it was. I very quickly learnt you don't argue, just set up a payment plan for £10 a month. Yy to ignoring anyone who says you need to pay it straight back or tries to make you pay £100s a month

Dreary. The system is shockingly complicated and confusing. I'm not stupid. But the way they run the applications and the amount of glitches on their system makes it very difficult to stay on top of. I got two payments in May. Of fairly large amounts. I called them and asked if this was right. I informed them that they had paid extra and were they 100% sure this was my money. They said yes. It 100% was. End of tax year adjustment and I was free to spend it.

And then less than two weeks later I had a letter saying id been overpaid. Thankfully I left it in my account because I hear about their cock ups time and time again.

@drearydeardre

I'm at a total lose why we have a system so lacking in transparency and clarity that is it completely impossible to manual check whether a calculation is correct.

You can write and challenge it and arrange payments. They now have it all online. This has happened to me twice and when I proved it was not my fault they reduced it and spread the payments out manageably. So annoying though.

I had to set up a payment plan to pay back the tax credits.

If people are on UC though the tax office say you are not in debt to them, that UC have taken it over, but you are not given a chance to set up a payment plan, my sons MP has even been in touch with them and they said it will take 14 weeks before they can do anything its disgusting,it has put my son in hardship,but they dont care, and that is illegal

How did the overpayment occur?

I successfully disputed an overpayment circa 4K and won as I proved I had "received the money in good faith" therefore wasn't liable to repay. It took me almost four and a half years of MANY phone calls/letters. I did have to set up a payment plan while the fight dispute was ongoing.

I had reported a wage increase and the advisor wouldn't update the amount. I told her that I wanted it updating else I'd be in an overpayment situation. She said I wouldn't. All this captured on voice recording and used as evidence.

It was a long, stressful at times road. But worth it.

You'll get another letter from a different company to sort out repayments...they were really friendly when I had to do it and we're happy to negotiate on repayment amount

@drearydeadre I deal with complex multi million pound tax returns in my day job. When I had to claim tax credits after leaving abusive ex I was shocked how much more complex and confusing the system is, the guidance is very unclear, it seems designed to confuse and trap people. I was honest and gave all the information I had and have quite straightforward circumstances but I still got stung with an overpayment and I found the whole process horribly complex.

My own (entirely unsubstantiated view) is that about 80% of tax credits overpayments are just due to the shoddy systems, approach and practices that TC use. The remaining 20% may be genuine errors of those systems and practices and processes.

You've only got to look at HMRCs IR35 thing which has caused all kinds of hoo har for people who contract. They've finally admitted they've never tested the IR35 calculator before releasing it and using it (and have now had two court cases go against them where the results of the calculator went against HMRC). They also don't even understand the relevant aspects of the law and so apply the findings incorrectly. One wonders if the TC computer system was ever tested and its accuracy confirmed as of an acceptably high standard? Probably not!

You can indeed take out a case but I think for many people the massive amount of to'ing and fro'ing with TC over it over a long period time as StopPOP says - for some cases it would be worth it, for others possibly not even if the amount were quite large - you'd have to dedicate a significant amount of time and energy to it to see it through and for many I've no doubt it wouldn't be deemed 'worth it'. Of course, TC should have an established open and transparent appeals process whilst at the moment I imagine they deal with each complaint as it comes in and it's difficult to determine if what they're saying to you is 100% honest and correct, or if they're just giving you flannel and trying to bamboozle you with 'facts' about how they calculate and all of that jazz.

If they can't create a simple calculator that works properly and always come up with the correct figure, I can't imagine that the systems that sit behind their decisions on how much people are due are any better. This is probably why they cannot cope with people telling them 3 months into a financial year that their earnings have gone down because the system was designed incorrectly in the first place and doesn't have the flexibility to accommodate this level of detail. Them saying that they always keep paying you so you're not suffering from lack of funds as their basic approach and only doing annual reviews is surely an admission that they know the system cannot cope with people updating them about their income and thus they never make the adjustments regardless of whether you phone to tell them or write, or both. They just don't change the payments until part way into the next year when they finally have you confirmed income for that particular year.

I had this back in 2011 when it was an overpayment of around £1200. It was joint claim with my ex. I agreed to pay my half at £10 a month. Took me til April 17 to pay it off. They still kept chasing me for the other half. I made it clear they would have to chase my ex for it.

Great explanation Doinitforthekids.

Years ago we were overpaid TC by more than 1K. They requested it back some years later. I disputed the amount as I had specifically rang them up (as per there instructions) to tell them my new salary - post tax. They calculated pre tax salary and also bundled in another historic alleged overpayment that was very woolly.

It took months, letters to MP and a big paper trail. In the end when I requested my telecon transcription it was there in black and white that I'd said post tax. I did not have to pay them back for that or other histogic overpayment (which I picked apart - I swear they pull these figures out the air).

If they have made a mistake then you must challenge it, even though it is exhausting at times. Always communicate in writing and recorded delivery. In my letters I asked them to explain how they had derived their calculations as they try to fudge you off with figures dating back years before as they hope it will be overly complex and dating back to a time that you can no longer evidence etc. They only listened when my MP stepped in and I asked them to justify their calculations, to break down further for each year they claimed an overpayment had happened. They hope it's too confusing for you.

If the mistake is geuinely yours then you can settle on another payment plan.

In the end (before this job) I was getting such a small.amount and I was still worried they'd cock it up that I'd keep it saved in case they called for it back.

Dealing with them is so hard and always do it in writing (even though they do not allow emails).

It is indeed a huge paper trail and I still can't bring myself to throw it away. Many times my DH said "let's just pay it" but I was furious and adamant.

It's a huge commitment to pursue it and you need oodles of patience and tenacity. Recorded delivery all the way, names and dates recorded etc. It was largely down to the fact I had taken the advisors name when I updated that I could pinpoint the time.

Yes I agree Middle they deliberately try to put you off progressing an issue.

I tell you what I'd do now if I was every calling them - I'd record absolutely every single phone call myself so as to avoid the long-winded rigmarole of writing umpteen letters before they agree to finally listen to their call logs. Not sure how much that would help but honestly, you'd have to go down to forensic detail when dealing with this lot.

Absolutely every single payslip, tax codes, taxable benefits claimed in detail, amount of tax deducted, dates, hours worked, dates you notified them of changes, dates and times you rang them, dates you despatched recorded deliveries, dates recorded deliveries were marked received by the recipient, dates of replies - it's a big job of work and I'd have to say if I was advising someone just going out to work it would be: Keep your income, employment, NI, tax, tax codes - EVERYTHING absolutely up to date and accurate don't lose track of any document ever - that's the basic starting point to have any hope with TC or HMRC or anyone else that can dabble in your income.

That's good to know StopPOP that the advisors name is key. I think folk would be advised to use a checklist every time for every single communication (be simple to make one):

Today's date
Time
Event: Received letter from TC Received annual statement from TC Received overpayment notice from TC Received underpayment notice from TC I telephone TC I wrote to TC
Address I wrote to
If named person written to, the name of that person
If telephoned, name of person I spoke to
Questions I raised (all prepared in advance)
What I was told

Confirm everything they tell you twice, record it and write it down. If you didn't record it yourself it wouldn't protect you if they said "Oh sorry our call recording system was down that day" and then you'd be stuffed.

I totally get where you're coming from with the principle of the thing StopPOP though I really do! It does make your blood boil. Sometimes I'm up for a battle on these grounds sometimes not - God help anyone when I am though!

Just to add - I used a site called Tax Credit Casualties. This was some time ago and even then they couldn't reply, but there are templates and advice.

Agree with DoinIt.. I would record it too. I would copy in all letters c/o your MP too.

Good luck and keep on keeping on! They will get away with whatever they want unless challenged.

That's a good link Middleof. I'm not in the TC misery cycle at the moment (apart from I'm still paying off an overpayment at £20 a month and will be for a long time!) but it's useful to see what's on there in terms of support and suggestions - there's no guarantee my current employment will continue as it is, who knows it could go down lower or I'm no longer able to work full time for some reason and I might need them again.

I had a similar situation but with housing benefit.

I was informing tax credits that my wages had changed and they WERE adjusting my tax credit payments.

My housing benefit payments also adjusted (upwards) so I knew that tax credits were communicating with them. Turned out they were, but only that they were paying me less. Therefore HB paid me more. Ridiculous.

Only realised when I had over £4K in overpayments. They are taken back about £100 a month through my current HB.

That's ok, I can cope with that, but it means that I am stuck needing to be on low wages and being in receipt of HB as as soon as I'm not I'll have to pay it all back.

It's ridiculous. Benefits causing hardship, bloody crazy.

I ended up with an overpayment too, stemming from after I started work when my son was nearly two. It’s so illogical, as you only become eligible to claim when both parents are working and you are paying childcare, but they only ask for your previous tax year’s income i.e. which was before you started the job that made you eligible to claim! So they asked for my previous tax year’s income which was zero and based my award on that (and DH’s income). The claim form asks for the name of your new/current employer and how many hours a week you work (you know, of the new job you’ve just got that makes you eligible to claim...) but doesn’t ask the income!! I ended up with an overpayment of approx £3k. I even went to my MP who wrote on my behalf to the head of HMRC tax credits, but I just got a reply back to say I hadn’t told them my income at the time it went up. Well if they had asked for that on the initial claim form, I would have gladly have given it. I set up a payment plan at £50 a month but was fortunate to sell a property giving me some spare cash to pay it off. It was so stressful in trying to fight it, I just gave in and paid it off as I had the money. The whole system is so badly planned, and so many people end up in this position it’s awful.

They only listened when my MP stepped in and I asked them to justify their calculations, to break down further for each year they claimed an overpayment had happened. They hope it's too confusing for you.

I agree totally with you on this Middle

I was the poster upthread that had a 10k overpayment written off by TC as it was due to their error and the paperwork I had ultimately proved this.

If I had my time again with this situation [hopefully never as I no longer claim TC anyway and it was horribly stressful, I was constantly anxious and not sleeping properly] I wouldn't bother with all the recorded letter writing I did to TC as they ignored the majority of my communication anyway. I would appeal the decision through the proper channels and then I would have approached my MP for support straight off.

It was only when my MP stepped in with his official HOP letterhead and direct line to TC head office that things started to happen. Apparently MPs are obliged to assist their constituents in these circumstances and TC are obliged to respond to an MPs request for information. So it is absolutely worth a try and may save you months of misery and worry.

Terrible to hear that so many of you are still having such issues the convuluted and obstructive TC system and 'helpline'. I wish you all the best of luck in getting it resolved promptly.