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?

DISGUSTING

It was actually proven that the reason I was overpaid was down to a Tax Credits employees mistake. I still had to pay it back as I still wasn't entitled to it. I did get an apology letter and £50 written off the thousands I owed.

Totally on you for ignoring letters but they should organise a payment plan and not expect a lump sum back

Tax credit awards are always provisional, based on the previous tax year's income, and adjusted at the end of the tax year.

That's why it's important to notify HMRC of an in-year change in circumstances, such as starting work or a child leaving FTE, so they can revise the provisional award to reflect that.

You were overpaid because you failed to notify a change of circs. It's tough, but those are the rules.

Unfortunately they will have added on your earnings in that tax year, rather than month to month. So when they balanced the books, as it were, you had been overpaid. Wrong imo as once the payments stopped you needed to earn more then, not after April.
I don't know one person's n who has not had a TC overpayment

@CrumblingKnees i feel your pain, although a slightly diff scenario. I was aware that changing income throughout tax year affects claim amount. They base the award on the earnings of the previous year and only change award if the difference that current year is more than 2.5k. Working from Nov-Apr I’m guessing will be more than this. The payments were correct till August, and stopped due to children reaching age of 21, also correct. As your income deviated more than 2.5k in that tax year, the award amount has now changed meaning you’ve been overpaid. It sucks, but it’s correct.

in our case, I informed them of every income change that year to enable them to recalculate - they still overpaid us by 2k, and we still had to pay it back - no fault of our own, we did everything right. The system is shit!

When I looked into it at the time, it was v.common for them to overpay folk and claw it back - so we are paying back £20 per month (for blinking years it’ll be) to avoid having to go through a ‘financial assessment’ with them for them to dictate how much we could afford to pay back? I mean wtf - just no! Sad to see this is still the case - broken Britain!

Tax credits are worked out using your annual income, April to April. So any tax credits you got from April to august 2021 would be calculated using your income from April 2021 to April 2022. If your income went up in November 2021, that would affect your tax credit allowance for April to august 2021.

Your notice of entitlement would have advised you that you had a month in which to appeal against a decision. You should have read the letters. You could ask for a late appeal but would have to have very good reasons and the decision would have to be wrong in law . I think you should try to make a repayment arrangement with HMRC .

So how have you been overpaid?

it sounds like you didn't understand fully how it works and that they add any income up to the end of the tax year for the claim even though it stopped in August. See if you can pay it back in instalments as it seems like a genuine mistake

I do remember getting some letters from them but ignored as as far as I was concerned claim had ended (stupid I know).

Yep.

And that’s that!

Sorry but it’s your own fault, you have been overpaid. The amount you are due goes by what you earn in a tax year, so what you’ve earned since November will reduce what you were entitled to and had already been paid before you stopped receiving tax credits in August. You now have to pay back what you had been overpaid. That is fair.
It’s amazing to me how much people feel they are entitled to sometimes.

The payments you received up until August were based on a single salary. The amount you get depends on all incomes from April to April.
From April to August there was one salary
eg 20,000 pa your tax credits were based on a total of £20000pa.

However in November you started working let’s say you received £10000 from Nov to April

Thats a total of £20000 + £10000 = £30000
Your tax credits would be based on the total years income of £30000 and hence reduced.

So you were overpaid.

When you say you “ignored” the multiple letters do you mean

a) you didn’t even bother to open them
or
b) you read them but thought they were… kidding around and could be ignored??

We ended up with £8k overpayment through no fault of our own.

DH is medically retired due to an accident and subsequent injuries. He is getting his occupational pension. We declared the pension as income, which it is obviously. I was then told by a staff member that because he was receiving his pension due to illness we shouldn’t have declared it and upped our payments.

Years down the line we get a letter stating we should have declared it and had been overpaid. They weren’t interested in my explanation. We owed it and that was that.

Still paying it back now, years after we no longer receive it.

Tell them you can afford £10 a month OP. Tax credits were so frustrating! Wish I’d never claimed in the first place.

And I thought UC was a shit show. Reading through it seems a lot of people have been royal fucked by tax credit over payments.

Second what others have said OP. Appeal and then if they uphold the overpayment pay back the absolute minimum. Don't put yourself into financial hardship over this. £10 a month and no more.

Just furious that common sense is not prevailing

yes op. You said. Common sense is to read your post from Hmrc

Appeal on what grounds?

”I couldn’t be arsed to read the letters you sent me”

You must have been paid more than you were entitled or there would be no overpayment. Tax credits are based on yearly income

It's the way it's calculated for April to April I think. If you stopped your claim in the middle of that, you'll have an overpayment. It's just the way it's worked out.

Even if you contacted them before the January cut off, they still would have said that the overpayment was correct, due to the reasons other posters have explained.

January was just the cut off for raising the dispute, it doesn't mean you are correct. Even if you did contact them in time you would still have had to pay it back so don't beat yourself up about that.

I believe tax credits are based on your annual income (April-April I think). If you were earning nothing at the beginning of the year then presumably hmrc will have calculated your tax credit entitlement based on the assumption that you would continue to earn nothing through the whole year. From April-November that was correct. However, for part of the year (November to the following April) you did have an income. That income combined with your DH’s presumably took you above some threshold and you should not have received the level of tax credits you did from April-August.

So it’s like if you did seasonal work where you earned nothing in the winter but a massive amount in the summer - they look at your income over the year rather than day to day to decide what you’re entitled to. Otherwise you could earn millions from a summer business, do nothing in winter and get credits.

I may be wrong but I’m assuming that’s the issue.

Yes. Knew it was something like that. It's a right shit show, lots of people have had overpayments because of the way it's calculated.

Why don’t you think you’ve not been paid more than you’re entitled? Isn’t it based on annual income, and April to April I presume they’ve adjusted at your new run rate?

you might not like the system, but without knowing the exact numbers I would wager you are being asked to return what the system didn’t entitle you given your April to April earnings.

without exact numbers anyone is guessing.

YABU and yes, you were overpaid. Nothing wrong with the system - this is on you.