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!

I used to work for the repayment part of HMRC, the Debt Management Centre. We were responsible for collecting all monies deemed as owed to HMRC from Tax Credits to PAYE and everything in between.

The repayment dept cannot tell you why you have the overpayment, they can see the year it occured and have a reasonable guess but they are a separate entity to the TC dept and helpline.
Most advisors are more than willing to set up a repayment plan, however if it goes over a certain amount of time an income and expenditure may be requested - it's protocol, nothing personal.
Similarly you'll be asked if you are calling to make a payment within the first few minutes - again it's protocol and they can be warned during out pdr reviews if they don't, don't shoot the messenger.
They have limited knowledge of appeals but can give you numbers to contact.
They will ask you about setting up a payment plan if you are appealing as it is the only way to stop letters and further phone calls. It's an automated system controlled by another dept, they have no control over this.
If the overpayment is from a joint claim with an ex you are only legally liable for half.

Most overpayments are from about 7 years ago.apparently

That's interesting.

DP is a payroll manager, and for the last year or so they've been inundated with tax code changes because of historic underpayments of tax, and they all seem to go back 6-7 years.

I wonder if there was some software cock-up in the HMRC system and it's only just come to light and is now being addressed.

I wonder if the Limitations Act, which means to can't pursue a debt that's more than 6 years old, applies to tax? I bet it bloody doesn't.

Meanwhile, the likes of Amazon and Starbucks continue to pay the bare bloody minimum.

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's what Universal Credit does. It picks up all the date submitted every time an employer (or payroll company) pays the wages.

But people still find that hard. One month they may get a bonus, or a lot of overtime, the following month their UC is massively reduced, often to zero.

Of course, if employers paid people enough to live on, no-one in FT work would need to claim benefits.

Apparently the 6 year rule doesnt apply to them, and i dont thibk they even know the true years, i think they make it up as they go along,
As i said before, my sons letters are now calling him Mrs , and the years he was sup[posed to have owed thismoney has been changed
He rang them last week and asked for a return call which is supposed to be within 48 hours, they have not rung back, so broken their own rules,he has got a name wet signed on a recent letter, which means he can take it further, and it was personally signed
You can also join a high court website to sue the Government, not sure how it works but will find more details

If anyone is renting, struggling to manage and gets a big TC overpayment (or other benefits), I'd recommend going to CAB or Step Change.

I've helped a few clients get something called a Debt Relief Order for debts between £5k and £20k. It wipes all your debt and after a year you're home free, although you won't be able to get credit for a few years.

No good if you have assets, like a house, though.

I had an overpayment despite telling them everything. The guy admitted to me that there are sections of the programming where people have no idea what it’s doing.
We paid it back at 100£ a month for 2 years.

Surprise this morning for my son,he checked his UC payments and the charge for Tax credits has gone plus another £10 on top in his account
So £70 a week better off
Later had a call from tax credits saying it was now under further consideration, he had told them in the phone call last week about the alteration in the amount and the years in the letter his MP had rceivd back and his copy, also chenging his gender to female
So just waiting to see what happens next
My son also told them he has reistered with the high court, to sue

I obviously can't add up.he is £20 a week better off

suing because a mistake was made on the computer unless it was the being addressed as mrs ? - a waste of the courts time it will all be resolved.

Just got a letter saying I owe them but I haven’t had a payment in two years.
I’m supposed to just pay it straight back which is impossible for me to do.
I don’t think I even owe it I always kept my info up to date etc

Yep, you are screwed!

Who ever is at fault, and its usually them, its your fault. Appealing is pointless because its your fault. Did I mention that its your fault?

Either pay it off as fast as possible and get shot of them, or negotiate the repayment down to a level YOU can afford. Trick is not to say you can't / won't pay, just that you can only pay £X. Start low and let them "force" you up to your limit.

I'm worried too. I told her them last year when had income, they reduced payments... But not entirely. Apparently you can do it online. I don't spend what they give me know. I'm just wondering from how far background these overpayment can go. Ie once we get to April next year will we know...

@user1497016724 not necessarily.

If you can prove you updated and requested amount be adjusted and they still paid you same amount then you can be deemed to have received the money "in good faith*

It's a pain yes, but definitely not impossible and I'd hate people thinking they were "screwed" no matter what.

I've just had my 'annual review' letter - God knows why seeing as I've not received any form of TC for several years!!

It - obviously - tells me I 'owe them money', about £560. I reckon this is in fact the remaining amount from the last overpayment that I am and have been and continue to pay off for about the last year and a half I think now.

So I'll have to phone them and confirm that's the case It should be described as 'outstanding balance £560 (you are currently repaying this at a rate of £20 a month); but of course that would be far too sensible!!!

Yes, this happened to me 12 years ago.

They arrange for you to pay it back over a maximum of 10 years.

This determines your minimum repayments. If you refuse and say you can't afford it they pass it to debt recovery.

My repayments were on hold and I didn't have to start paying it back until I was no longer claiming tax credits. I'm not sure if this is still the case now.