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?

YABU for ignoring letters and for not getting a job earlier. You were happy to not work while you were getting benefits but magically could work when they stopped? Funny that

I got caught out like this years back, but really it was my fault for not reading up properly. My income ended up higher than I'd estimated for the year I claimed them, so I had to repay a sum. In other words - The credits paid were based on the income for the year before I was actually entitled to and paid them, so when they looked at what I actually earned in that year I owed them a refund. You can get really reasonable instalments though, if you're assertive with them.

I read it more as they stopped when kids left education so she had to rather than stay home to care for them?

Your income for the whole year does get taken into account unfortunately. Whether or not a claim is active, they base the payments on you earning 5he same throughout the year - that's one bedmbefit of UC over TC... However, if you think their calculations are wrong I highly recommend contacting the Community Law charity. They4e fantastic and will definitely be able to help... Mention this to HMRC and they should allow you to dispute

This. We have been caught out by it in the past. But you started getting paid in the same tax year as the payments were going. Presumably a fair amount if you were overpaid £2k between April and August.

It is absolutely correct of HMRC to base it on a years salary, rather than on a month by month basis. Some people get different amounts every month. Some people as paid with a bonus system. Isn’t this the problem with UC at the meoment

@tunamayo81

I do think most people know tax years run from April, because as soon as you've worked one year, you have your p60 which clearly states it. (I suppose if you've never worked you might not know it?)

Benefits depend on wages, the less you earn the more you get, so I don't think it's too difficult to work out that if you start earning more in the middle of a tax year, you'll have ti pay some accrued previously back.

Its why if you're planning on giving up work, you would aim for a November for example, not a March.

Moment

Your'e angry because you've messed up or you dont understand. You've ignored letters and not kept on top of things. Your tax credits are based on predicted income. If it goes up or down or there are significant changes you're supposed to tell them. You told them the twins were no longer in education. Great. You then got a job and brought in additional income for over 6months of that financial year. This money needs to be factored in. For half of the year you were entitled to some. If everything had remained the same you'd have got the same amount till April.
If you're struggling to understand let look at this example.
Imagine that April to February you earn £100 a week from a part time job. You'd get lots of tax credits as its no where near enough to live on. Then in March you get a job where you earn £1million for a weeks work, but you say to them 'I'd like to shut my claim down now'....would you not expect them to recover the £1000s they'd paid you throughout the year? It's like that, but not so obvious. It might have been April 2022 before exact figures were available and from this last financial year 22/23 you might have had a tax code adjustment to recuperate some of the money you owe. Suggest you continue on basic rate until its paid. They're pretty reasonable with payback. Not paying taxes is a criminal offence. Don't ignore any longer.

Benefit claims run April to April too, so anyone who claims benefits would know too, not just those who have worked.

Care for 18 year olds who were in education?
and they now magically don’t need care and she can work? Not adding up really is it?

Anything like me, it's because tax credits are in arrears - so basically then crawl back the last years worth of payments that they paid you.

There's literally no way of coming off tax credits without having an overpayment.

I owed them £2k too when we earned enough and finally didn't get them anymore. They'd always had the correct info. Finally one of the people I spoke to at TC's said the overpayment was the final years payment.

I understand you were having a stressful time but I can't really imagine ignoring HMRC letters. Weren't you curious??

I think you were no longer entitled to benefits after you told them your adult sons were no longer in education....however you claim ended at the end of the tax year as payments are calculated over a tax year. Your ANNUAL income for that year went up considerably.

This

@FamilyLife2point4 exactly that! When I received the payments I needed them, I've just been very lucky to have my pay increased and not have to rely on them now. Just got to work out how to repay!

We ended up owing 5k a few years ago.

I used to call every year to renew and go through everything on the phone with them to make sure figures were correct. Every time we had a pay rise, I would call them and notify them by email (or however you were suppose to, not claimed in 6 years so have forgotten).

And still it all got fucked up aomehow!

Iv had similar with tax credits. They make it so complicated its impossible to know if payments are right or wrong so you rely on them to do it correctly. I also have a very bad habit of not opening post so can understand how easy it is to be unaware of these situations. I think the only thing you can do is pay it back over a period of time so it doesn't significantly impact you like a fiver a week

but it's fine for this government to give £15 billion in taxpayers' cash to their friends for fake PPE, but woe betide anyone who gets in a muddle with their tax credits.....

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

Stopped reading here. Amazing that people think they can ignore letters then scream that whatever happens as a result is DISGRACEFUL!!!

Well no, neither of those things is fine

I very rarely open my post either, some people are just like that

I’m sorry but you knew your circumstances would change, got letters that you ignored and now it’s not your fault?!? Ridiculous, YABVU.

@berksandbeyond you seem annoyed at folk who work the system to their advantage. They were full-time SHM, entitled to credits and could live comfortably, now not entitled and picked up a job. Could OP have picked a job up sooner, maybe. Maybe she felt kids weren’t mature enough to be left alone or have ASN or maybe she wasn’t confident enough to get back out there and it was the push she needed.
Stop judging her circumstances.

@pleasehelpwi3 just another example of broken Britain - the politicians, bankers and business conmen get away with ripping off the public purse - the poor public get penalised for their systems? Get the Tories out - and the red Tories, and the yellow Tories.

Thats fine but you then can't complain about missing a deadline that you were informed about by post.