To think this is DISGRACEFUL! Massive tax credits overpayment!

[CrumblingKnees]

Just furious that common sense is not prevailing and I am essentially being robbed of money by HMRC!

So, twin DC finished education in summer 2021. Both have a disability, DH works but we were entitled to tax credits as wage not massive and we got the higher rate due to disability. I remember getting a letter saying tax credits would stop from August 31st due to this. Was aware and knew I’d have to find a job to cover the shortfall.

Payments stopped and I then started working in November 2021. I do remember getting some letters from them but ignored as as far as I was concerned claim had ended (stupid I know). Youngest was diagnosed with a serious illness last summer and I’ve been a bit of a mess, not keeping on top of things like I normally am.

Anyway got a letter from them a few weeks ago saying we’d been overpaid almost £2,000! Shocked, rang and basically they’d added on my work income from November onwards to my tax credit claim for that year (it was not closed). I assumed claim had ended in August and if it had been there would be no overpayment!

I’ve explained this and filed a dispute. They’ve come back today and said that as I didn’t dispute before the end of Jan the overpayment stands and we need to pay it!

AIBU to think this is a pisstake and totally wrong for a government agency to take money from families like this?

Tax credits are worked out from your estimated income for the financial year (or based on your income from the prevoius year).

Even though your payments stopped in August, taking a job in November increased your annual income, which was taken into account when finalising your annual claim in March/April the next year.

If it wasn't made clear to you in the letter from HMRC when your payments stopped, that the claim would be finalised in April and if your income goes up you may need to pay some of it back, then yes, that's bloody annoying.

In any case, you can ask to pay them back in instalments. I would offer to pay a minimal sum each month and see how they respond.

As others have said you earned more in that tax year than estimated so you were overpaid.

But the tax year runs April to April so the August November thing is irrelevant, your income was increased?

Gosh yes, imagine the CHEEK of HMRC sending out letters and expecting you to read them.

This is correct/. Tax credits are calculated annually so if you start a new job half way through the tax year, they will calculate the whole years earnings. this is why Uc is much better in some ways as calculated monthly so no huge overpayments, or not often.

Tax credits are calculated for the year april-april, so if your claim ended in August you will have been paid 5 months worth of tax credits up to that point. If you then started a job in November your earnings from Nov-March will then be taken into consideration for the year you are currently in. Your income you wrote on the form last year eg 30k is not what you jointly took home, you might have earnt a further 20k nov-March which takes you to 50k and way over the threshold. We got stung years ago the same way, you can't appeal as it's correct, I guess that's why it's up to you work out if your income will jump up and enter much higher earnings, even if you don't currently earn that.

They are not taking money from you, they are asking you to pay back money which they paid to you based on your previous earnings and with 2 disabled children on the claim - which as I'm sure you are aware increases your tax credit threshold hugely. When those children came off the claim and your earnings increased with you taking a job you were overpaid.

I had a very similar situation, they insisted increased payments were correct (I triple checked with them because we had ended up with an overpayment a few years previously). And then suddenly it turned out we had been overpaid, without any change to our circumstances. The system is frankly baffling, I have never managed to work out how they make their calculations. We're now paying a large overpayment back at £10 per month!

I don't think you are quite understanding how tax credits work.

You would have got paid tc in the same year as you had declarable earnings - you were overpaid and then didn’t notify them in time. Surprised it’s not more tbh.

You have been through a stressful time. But why did you assume the claim had ended. And you ignored the letters. They will allow you to pay it back over a period of time. Can't see what they have done wrong in this case.

It is baffling and there was so much wrong with the old tax credits system causing lots of people to be overpaid. This is partly why Universal credit has replaced it. It is so much simpler, easy to work out how much you should get each month ( simple calculation), and calculated on a monthly basis rather than annually so if you work overtime, or get a pay increase, or your situation changes it can easily adapt rather than months down the line when the problem is picked up and people told they owe huge amounts.

Yanbu. Anyone who says you are has no idea

HMRC made mistakes but assured me over and over that I’d get a lump sum that it was mine not to worry etc

couple of years later and they say whoopsie, we made a boo-boo and now you owe us £6k. Fuckers.

That's not how it works. You are thinking of universal credit.

Your claim is based on your annual income. You can't stop it midway through the year then earn loads more. Or, you can, but you will then have an overpayment.

I'm sorry you are going through a lot with illness.

Yes Tax Credits are shit and fuck up regularly. This doesn't mean they are always wrong and in this case it doesn't seem they are

1. You have been over paid, as many PP have explained very clearly, it's based on the tax year.
2. You ignored letter that could have sorted this earlier.

HMRC are usually pretty good at payment plans. You can offer an amount a month to repay and generally they are accommodating

You were unfortunately paid more than you were entitled to, even though you stopped your claim in August 2022, April 2022 you said our earnings for April 2022-March 2023 was eg 30k, when in actual fact it was eg 50k. If you'd written on the form back in April 2022 you'd earn 50k you wouldn't have been entitled to any tax credits (or very little depending on your actual earnings). It's a silly way of doing it as you can't actually get off it without either owing them or receiving less money when you still actually need it. If your claim ended and you started your job 1st April you'd be fine and not owe anything.

You are wrong. As many have said and you have ignored it's based on household total income April-April. It's irrelevant that you received no payments from September onwards. You owe them the money.

Don’t think I’ve met anyone in real who hasn’t suddenly been hit with a huge overpayment at the end of their claims. We have 5k apparently. Because I started to work I only earned 3k in that period. Go figure.

This is why Universal Credit is a lot better in some ways as it adjusts to your income in real time and you don't (or shouldn't) have overpayments if your income changes.

So sorry to hear about this OP. Might be worth approaching Citizens Advice or another benefits charity to see if they can help you challenge it, or at least help you set up an affordable repayment plan if the decision can't be changed.

I know people to have over payments in the 10,000 range so 2 grande is nothing really. They are notorious for errors, surely you knew this? That's why they are moving everyone over to UC, less room for error with that system. They are not robbing you because it was never yours in the first place.

NOVEMBER WAS IN THE SAME YEAR SO AFFECTED OVERALL WHAT YOU WERE ENTITLED TOO. I agree it's a bit shit though. Maybe the letter you threw away would have explained it better.

Pinkpip100

£30 monthly I'm doing so fed up of it already !

A few years ago this happened to me, and I challenged it. Asked for the CD recordings of my numerous phone calls, where I told them that childcare had stopped , then later on found that they had incorrectly paid us and again told them that we did not need this money and had stopped the claim. Didn't make a blind bit of difference, to describe it as kafkaesque would be kind. I decided I could waste days and weeks of my life, or just tell them I couldn't and wouldn't be able to conjure up thousands of pounds I didn't have. In the end they changed my tax code and it was repaid that way.

you werent paid more than you were entitled to at the time but because they run in total income for the financial year, you were paid more than you were entitled to over the year. Then you ignored them.

the same happened to me. Dh was made redundant when i was on mat leave. When i phone i was clearly told as soon as either of us started working we would be over the threshold and would have to pay it back. It stung paying it back but we needed in until dh got another role.