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?

If HMRC stopped putting HMRC on the back of their envelopes we wouldn't be terrified of opening them 😳

@WilsonMilson its not as B&W as feeling entitled to it.
Folk budget based on what they have.
It would be fairer if they based it on a month to month income basis, at which point they probably wouldn’t owe anything.
As it’s based over a year (easier for them to process I guess) folk are then penalised for working because their income has reduced mid-year (tax credits stop) and they’re working just topping it up to what it was, and now owe money back as their overall annual income has increased. Some folk live hand to mouth with tax credits, to then be penalised for working due to their crap systems, is a slap in the face imo.

The whole system is shit! I know a lot of people have had to repay significant sums. Happened me years ago - absolutely no change of circumstances and we were getting like £40 for one child. Got a bill for overpayment, think something like £700? Not sure that would even have been possible. Was still fairly new system then, so we took a chance, ignored the bill and never claimed it again. More hassle than it was worth! So even if we had been overpaid (and I don't know how we could have been) they got it back and more anyway!

I love the way the op is trying to convince us HMRC are wrong

OP, you didn’t bother to read multiple letters from HMRC. You’re not exactly someone people will take what they say regarding finances very seriously 😂

How would you like them to contact you? Tell them. They wrote to you, YOU ignored the letters🤷🏼‍♀️

Sometimes people who are a poor mindspace make errors of judgement like this. Obviously the OP should have read and dealt with the letters but I guess she knows that now without having to be told?!

Oof it does sound a bit unfair.
But on the other hand if you were able to work to support your family, it seems morally wrong not to have been doing that in the first place?

But she still thinks the HMRC are wrong when very obviously - they aren’t

It's actually quite shocking how many people claim tax credits and are completely oblivious to how they work.
You should always read up on any benefit you are getting not only to get exactly what you are entitled to but to protect yourself from situations such as these, especially if you know yourself well enough to admit you ignore mail from the HMRC.

This was my tangent thought too when I first read the op. 'Our benefits stopped so I found a job' . Implying that the op was capable of getting a job before then but chose not to bother because the tax payer was footing it.

I feel sad for you, i think this was an easy mistake for you to make, they base it on the whole tax years earnings April-April but why would you know that? bastards don’t tell you so they get money out of you through things like this It’s completely understandable you thought as you’d stopped being paid in August that was the end of it. so now you’re getting less benefits and you have a debt to repay 😢 Unfortunately, by the official rules you do have to pay it back, but I totally see how you got here.

@tunamayo81
I would say because it's absolutely obvious is why you would know that. As demonstrated by the poster after poster detailing how it works on an annual basis after the op shouted that she hadn't been overpaid, when she clearly had.

YOU WERE PAID MORE THAN ENTITLED. I cant be bothered to read all the replies but tax credits are worked out on the YEARLY income April to April.
Tax credits were calculated on you not working.
when you got a job in that tax year, the yearly income was recalculated at the end of the tax year and created an over payment unfortunately.

It has the dates for calculation on the award letters they send you, so it actually is very clear, so long as you read them.

Honestly it is no ones fault but the ops.

Same thing happened to me OP. I got a full time job in October 2010, informed them, payments stopped. March 2012 got a letter saying I had been overpaid £2600ish. Rang, rang, rang and rang them never got to speak to anyone on the phone, sent a letter asking them for a breakdown and got a letter by return saying "we will respond in xyz weeks" (don't recall exactly) and then heard no more. Life went on and I forgot all about it.
Fast forward to March 2019 and I get a letter from them informing me they had applied for an attachment of earnings to recover. Was a nightmare again trying to speak to someone to sort it out and in the end I just gave up. It's paid off now thankfully. They take a percentage of whatever you earn, so the more you earn the higher the percentage, think it's between 5% up to 60% without checking.

@Lovelyveg82 i would argue hmrc systems are wrong. Basing it over a year makes things like this go in their favour (so to speak). If they based it on weekly or monthly income, they probably wouldn’t owe anything.
It does make me question why - when a claim is ‘shut down’ it is still actually active to the following April. Why does income after a claim is shut down still count? I can see why OP is struggling with this - it doesn’t really make sense (even though it’s how they work).
For example:
Family is living on X per month therefore need/entitled to Y amount of credits. X+Y =Z. Credits stop, family really struggling with income X alone.
Family manage to add V income to household. V+X =Z, family can breathe again.
HMRC now say family earned too much that year and owe back N amount, but family have no more money per month than they did do while receiving Y credits. HMRC previously said X wasn’t enough so gave them Y to make Z, but now saying Z is too much (when they’re bursting their arse to make V, to add to X, to make Z again). This isn’t right imo and bamboozling tbh!

Same thing happened to me. I was fully aware that the payments for my youngest would stop in August, along with child benefits and child maintenance from the ex. No problem at all.

As I was going to be down about £700 per month I started looking for a better paid job. When my boss found out he said they would give me a £7k pay rise. I was over the moon as I love my job. It wasn’t until April the following year I was told this now meant I’d been overpaid in tax credits for April to August.

Money is so tight already I cried down the phone to them and I only have to pay £20 per month back. Will take a few years mind.

But I literally had no idea getting a pay rise would cause this. Yes I understand the ‘logic’ behind it but how the hell was I supposed to know I was getting a rise. Much sympathy to you it’s crap !!

Your tax credit claim runs April to March. Any payments you received were worked out for a full years benefit. Starting work in November means you have been overpaid as your income for the year is higher than when they worked out your entitlement. Sorry, but your overpayment will be correct

I had this they calculate it over a year, I stopped receiving payments and changed job. Due to me being paid PILON for 8 weeks and salary for the new job it meant I was over the threshold for the year which meant the entire year payment had to be paid back. OP seems to think it’s calculated on a month by month basis but it’s not.

I'm in the same position, I received a payrise in January which meant my earnings for the current tax year now take me over the threshold, I now have to repay everything paid to me this year. It is what it is. Unfortunately Tax Credits don't work in real time like Universal Credit.

If you have been overpaid surely you accept you must pay it back
Ask to pay in instalments

@Whyislifesohardsometimes it does beg the question - why can UC be paid in real time and tax credits not? The systems are there …….

Is it? My Dad is an accountant that’s the only reason I know about tax years as when I was a kid he he was so busy after January -March doing all his stuff but otherwise I maybe wouldn’t know? I don’t claim anything so I haven’t seen the letters they send but it seems an easy mistake to make to me.

Thats why everyone is being moved to UC, so they are on the new systems and reducing the chance of this happening as it has been an ongoing issue for years.

It’s an odd system… I’m going to have to pay back my tax credits from this year. I also claimed what I was entitled to from April - July as my DP moved in.