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?

We were overpaid by 3 grand when I went self employed (mid tax year) and I couldn’t estimate income. Could without it obviously but paying back in monthly instalments. Totally on me, and should have made more effort to estimate properly, yes - you need to read the letters and have found them very helpful on the phone to sort it out.

I’ve been paying them back 17000 for 6 years. It will be paid back when I’m 67. They thought my ex was living with me when he wasn’t but I was going through a bad time and didn’t fight it. I just set up a payment plan. I will never ever claim tax credits again

Seems wrong to add a per anum wage to a whole year, however if (nov-apl) they've only taken into account 5 month and have sent letters then fair enough....
Either way dispute or negotiation I'd recommend contacting CAB. (or similar).

If you recieved money you shouldn't have had and you spent it instead of giving it back, then you're going to be O/P and will have to pay it back.

You still had money you shouldn't have had, unfortunately. Do you not check your bank statement online?

They did this exact same thing to us a few years ago!
We did everything correctly too. I phoned them when my husband got a pay rise and said we no longer needed to claim, which I was assured was all fine. Also never recieved any more money from them after that, but come the end of the tax year they treated our income like my husband had been on the higher rate all year and said we owed over £800.
We tried disputing it too but ended up paying it back monthly.
I think their new Universal Credit system works much better as I believe you update them every month and they pay in arrears so there’s not the same risk of the really confusing system.

Maybe complain through Resolver as you’ve not actually done anything wrong and were entitled to the money at the time they gave it to you.

Hi.. Please excuse my ignorance! But, I no longer live in the UK, dome 17 yrs in Spain. But, presumably tax credits boost your bottom linevtake home pay? Please excuse my ignorance if Im wrong on this. How do they work and why do you get them if your are employed? Sorry again.. Probably will look it up. As a full time employee some 19 years ago Im sure we didnt have this

I’m sorry this has happened to you. It happened to me a few years back and took me a while to get my head around it too.

I received Tax credits whilst studying full time to be a teacher and my husband worked. I qualified and was lucky to find a job beginning in the September term… cancelled our claim and did everything right. The following April we were hit with a huge overpayment bill despite not having received any money for approx 9 months. It’s because our monthly payments were based on my husbands annual income only. I took on full time work between sept-April which hadn’t been included in our Tax credits award. Had I have known (and told them about) my expected annual income for that year, we wouldn’t have been entitled to any Tax Credits for the period. Hence needing to repay.

It’s a flawed system in that April-August, we did only have my husband’s income and needed the help from Tax credits. And if I hadn’t found a job until the following Tax year, there wouldn’t have been a problem. But as it was, we were over payed and had to pay it back.

Can you appeal the decision? I would try

I totally feel you.
I had something similar, I was getting, housing benefit and child tax.
Then I started work, so I told them that I was working and when I had started.
A few weeks later, I get a letter saying they had over paid me, I owed that £700. Which I didn't have, so set up a payment scheme. Then when that was near paid, the arse hats, said I owed some more. Nearly £900.
Thing was, one department, didn't didn't tell the other, that I was working. So it wasn't my fault, the couldn't run a piss up in a brewery.
So this doesn't surprise me, that they didn't cancel when you thought they would. So I don't trust them as far as I could throw them.
My DS turns 16 this year, he is going to college, so I have to make sure I tell them, in advance.

Appeal what ? Doesn't sound like there's anything to appeal. It's just that op didn't understand how tax credits work which is totally understandable but appealing isn't going to help.

Isn't the point that tax credit entitlement is assessed on the basis of income over a tax year, April-March? So if you got a job in November, then regardless of the fact that you were no longer receiving the tax credits from August, your income Nov-March increased the household income for the tax year such that your previous payments in that year then amounted to an overpayment. So it's nothing to do with the claim having stopped in August. The only way you could have avoided this would have been to wait to the end of the tax year to get the job.

As others have said, you can pay this back in affordable instalments. Call them and tell them what you can afford.

I did this after I had a similar situation to the OP in 2013. Had a salary increase, told them, they didn't adjust my payments. I complained, they still didn't. Despite the fact that I moved house 3 times and jobs twice in the next 8 years, they didn't give up and in the end I gave up complaining and paid back the money (£800) in monthly instalments.

Go to your MP and ask them to help you appeal the decision based on your circumstances at the time you were receiving the letters - as you say you weren’t capable at the time of dealing with paperwork as a carer of a disabled child who was unwell. It’s likely you did get an overpayment as although at the time you got payments and spent them you were entitled - then by the end of that tax year you weren’t.
They don’t have to allow appeal as you’re out of time but a good MP can state your case for you if you have evidence, particularly if repaying will cause hardship.

Ignores letters from HMRC then raging that you’ve been incorrectly charged and have gone past deadline to do
anything about it?! Who on earth ignores letters from HMRC?! 🙄

Hey. I used to be a manager in the tax credit department for many years. This is the most common type of dispute we received and it’s due to a lack of customers understanding of how tax credits are calculated. The overpayment is likely to be correct. Even if you called to officially end the claim in August, it wouldn’t have made any difference. Your entitlement from April to the August is still based on your annual income. So if you started working part way through that tax year, which you did, it will take your full years earnings into consideration. The best way to explain this is, that tax credits isn’t a weekly or monthly benefit based on the income you receive at that time. Instead, it’s a top of your annual income. So even if you only claimed for 1 week of that year, it would still be based on your annual earnings.

Same thing happened to me. Had a joint claim with my ex for 9 years. We split in September 2016 so I ended the joint claim we had. I moved out in the October and started my own single claim. My ex didn’t have any further TC claims.
I was then told I had an overpayment from April- September 2016 as when I had left my ex and moved out my ex had gotten a pay rise that Christmas and because it was the same financial year I had been overpaid £800.
So even though we weren’t together and I got no benefit from his pay rise I owed them money 😐

You were paid more than you were entitled to pro rata it would seem. Otherwise they wouldn't be writing to you saying that would they? Unless you're saying they're wrong? But my understanding is tax credits are worked out across the tax year. Its why people who earn varying sums each month have to constantly update them. And if you earn a set some but then circumstances change you have to tell them so it adjusts. They have obviously adjusted it for you and you'd across the year have been entitled to less. They should allow a payment plan though to help you reasonably pay it back.

True

They overpaid us about £3K. We’re paying it back monthly. Husband is self employed and the calculations were based on 2 years previously, I still don’t really understand what happened to be honest. They bombard with thousands of letters

They would have calculated your claim based on predicted income over the year but then when you got a job those earnings would have increased your income and so you’d be entitled to less….I think!!

PS I don’t always read letters and one time I realised I had 2 mobile phone contracts when I only wanted 1!! Definitely a lesson was learned!!

I am paying back an overpayment of £3500 in working family tax credits from 10 years ago. I received a letter two months ago informing me that I needed to repay this. I have been in continuous employment since I claimed the credits and have been paying tax. Why did it take so long to let me know?? I had just changed jobs to earn more money because of the cost of living going up when the letter came and the extra money is now going on the repayment.

So basically they work out your entitlement based on the previous years income. Then in the April they confirm if they were right or wrong. So your payments for 20-21 were based on income from 19-20. Then in April 21 they confirm if your income was correct. It was. They then estimate 21-22 based on the income for previous year. 20-21. They have you a full year based on the 1 income for 2 kids in education. But come April 22 they check if they were right. They realise that the kids left education in august 21 and you started working in November 21. So the full year they gave you was actually wrong once they confirmed the 21-22 full year earning which now includes your new job.

this happened to me once and I had to replay a lot.

also what happened to me was my husband left me in October and I had not been working. We weren’t getting tax credits from the April as based on his income our joint claim meant we didn’t qualify. I had been made redundant but it didn’t matter as he worked full time (still minimum wage). But then when he left and I put in an individual claim I became eligible as I was single now, no job and 2 kids. Then they back paid me a lump sum because they now calculated my personal income from the April to the following April and over the full year worked out I was now owed.

the system is not fit for purpose. That’s why they’ve got away with tax credits as I believe this shouldn’t happen on universal credit as it goes on monthly income as to how much you get the next month. But for me moving to UC will apparently see a drop in how much I’m entitled to so I’m waiting to be forced over.

I do dread tax credits every year. My overpayment was to do with childcare. I claimed for my DD in nursery for extra hours. Told them when she finished as she was starting school. They failed to do anything about it and kept paying me for the childcare which I hadn’t realised/ when I did my renewal on the phone in those days I told them in the April my DD winks be leaving childcare in the August. They said they could plan that into the system and I had to call back when she actually left. They even found recordings of my phone calls but still claimed it wasn’t their fault.

Happened to me too. it ended up going to an agency because I ignored letters. This was after had just finished paying off a bloody tax bill as a previous employer hadn't been paying my tax, and had no wage slips for a few months 😡 talk about insult to injury,and I had been widowed so single parent , been paying it for years only just managed to pay it off , bloody hmrc, maybe try going citizens advice see if there is anything they can do to help ,

I know nothing about tax credits and have read the thread, still a bit confused though.

Have they actually paid you money and now you've got to pay it back ?
Or are they saying you have to give them money,even though they've not paid you extra ?