Tax credit hell :-((

[yetmoregrief]

I've been asked to give actual figures for childcare for last financial year and got out all the receipts and totted it up. There may be one or two payments not receipted but not likely to add up to much more. It turns out I projected an average spend of 114 per month over year but it's actually been £95 on average over the year unless I've got my Excel wrong.

Obviously, I have no problem with the principle of repaying if I have been overpaid but it comes to over £800 which I can't repay in one go. I earn £8.50 and hour for 18 hours a week.

I have to pay all childcare as no family nearby and can't do reciprocal care with friends as I am a lone parent so hard to return the favour (plus am so knackered looking after my two and doing a demanding job plus trying to get on a vocational training course for next year which will massively improve my employment and salary prospects so reducing the amount of tax credits needed by lots) but very competitive so stressing out about that and application due in next week so spending lots of time on that.

The stuff about penalties on the HMRC website scared me. I overestimated by £20 a week becauseI gave the figure when I was starting a new job at one week's notice and I had all on to get the actual childcare sorted out. Plus my X had just left. I had no confirmation from employers about the spread of the hours over my working week. I've had to use a total of six childcare providers over the year. It's all an effing mess. I can't say I have felt like I had £800 extra and I am really careful about budgeting. I am hoping they will let me repay overtime. Oh and my X is being made redundant so I will lose all but a pittance of maintenance unless he gives us a bit of his redundancy money as he has lots of savings. I could just cry. Have seen GP for anxiety and depression already and have meds to start when I have the time to atually pick up the prescription.

Just offloading really. Like I say I am not thinking of disputing the overpayment. I used to be a civil servant and know you have to receipt everything properly. It does look like I overestimated but for genuine rather than negligent reasons, certainly not with fraud in mind. Some childcare providers charge a half fee for holidays, some don't and some are much more flexible about longer and shorter days than it says in their policies when you sign up. It was all new to me. I used to work nights before we split up and so X looked after the kids so no childcare bills before. I certainly don't object to paying back but I just hope like hell they will allow me to spread the repayments over a few months.

I had an overpayment of £100 a couple of years ago. They let me spread it out over 5 months or something.

I must do my tax credits renewal too.

I have recieved overpayments twice; the first year was over £1000, the second time was around £400. Both times they were more than happy to spread the payments over 12 months; I believe they will also consider spreading payments out over a longer period depending on your financial circumstances.

Never been in this situation (re overpayment) but I am sure HMRC will allow you to spread the payments, see here

I thought they reduced your payments until the overpayment is cleared?

thanks for the replies. Helpful to know that they are not as punitive as the website makes out.

Slightly better this morning, now it seems I have been overpaid by only () £699 which would work out at £56 pcm if they reclaim over 12 months. It's so hard to know with childcare. I sometimes work irregular hours, some carers are more flexible than others. Substitute carers charge less/more. Work have very inflexible policies and said I would have to work on my non-working days sometimes and hang the extra childcare. Some minders will let you swap days, some won't. I really hope I get on the course so I can start to reduce the tax credits. Of course, we will pretty much live on baked beans and jacket potatoes during the course, but light at the end of the tunnel and all that.... No guarantees I will get a place though

i really hope everything works out for you,you sound stresed out (understandably so),good luck x

I really, really sympathise. Poor you.

First off, try not to panic. I had an overpayment a couple of years ago of a few hundred pounds and I was allowed to pay that back over 12 months.

I am in the same situation as you - 100% reliant on professional childcare and therefore WTC. I am luckier than you because I work a salaried position with regular but flexi-time hours. Technically, my childcare hours should be the same each and ever week. But of course, this doesn't take into account Bank Holidays, Sickness, Your time off, CMs time off, one-off events, possible change in fees, etc etc. It is IMPOSSIBLE to project an accurate figure. I have spent several days doing this years projection - it will still be out by the time we reach April next year. Last year's projection was underestimated by about £15 per week eventually, but i am so scared about triggering investigation into previous years (which I haven't totalled up) that I haven't claimed it back. I'm trying to think of it as offsettable against this year, if I end up overestimating.

The point is: there is no way in a million years that TCs will be able to suggest you were doing this fraudulently, so it will be dealt with as a simple overpayment, and if you are having genuine hardship they may even allow you to pay it back over a 12-18 month period.

Another thing that occurs to me is that you may not have to pay back the full amount anyway. You only have to notify tax credits if your childcare costs change by more than £10 a week dont' you. Does that mean that they will only make you pay back anything over that £10?

Hope it gets sorted but try not to worry.

Most childcare claims are being checked this year so whilst working all this out for your renewal it would be wise to collate all your receipts etc as well ready for when they ask.

They do usually just simply deduct the overpayment from future payments until its clear so you may have to submit a list of outgoings to show you cant afford to do this.

your childcare is not average though - it has to be a set amount and then if it changes within £10 per week you don't have to tell them about it?

I would sit down and work out from receits how much you paid in each week of the year and see whether it changed over £10 or not for more than 4 weeks

I was in the the situation of paying £20 per week and then it rose to £28 per week and they refused to change the amount as it hadn't changed more than £10 per week - three years I was £8 out on the childcare.

Then it reduced to £14 per week and guess what it didn't count as it hadn't changed more than £10 per week

yetmoregrief - you say you budget but you need to be really strict on your childcare budgetting to avoid situations like this.

As others have said they will not expect you to pay it all back in one go. But you are going to have to seriously control your budget over the next few months while you pay it back. Bear in mind you have spent that money on something so somewhere else along the way you are overspending on your budget. This is going to be a tough year for you while you get it sorted out :(

What is your calculated average costs per week for this current year? Put that figure into a separate account (or keep it separate on your budget sheet). Make sure you put that much money every week aside for your childcare, whether you spend it or not. Then when the bill comes in take it from that account. At any given point in time you should be able to see what you have estimated and what you have spent.
If you have money left in there at the end of the year you know you over estimated and you have the money left to pay it back should you need too. If the money in there is not covering the costs then you have under estimated and you will need to bring in more money to the account (either by paying it yourself from other budgets, or by getting your award adjusted if it has gone up by more than £10 a week)

My tax credit award tells me how much I advised them. I know they will pay 70% (used to be 80%) of what I advised them and I must find the other 30%. Every time I get my WTC/CTC or salary I put aside the amount I have budgeted from it. Every time I pay for child care I take it out of that account.

It is not 'in the pot' with all my other income and budgets. I keep it totally separate because I know that it may vary over the year and I may find that I have to pay some back.
Given they only adjust it is the difference comes to £10 or more a week on average I know that any payback is going to be a minimum of £520 (52 x£10). So I know I need to be really strict on it because there's no way I could find that much money again after it is spent.

It may not feel to you like you have had that money and spent it elsewhere, but you have. You must get your budgets under strict control so you know exactly what the position is at any given point.

If you budget effectively (and I know that's not always easy) then you shouldn't find that you have spent the childcare money on something else without realising it.

Moving forward you now have a more realistic idea of what your childcare costs will be. So hopefully you can get your budgeting fine tuned.
Keep a spreadsheet of what your estimated costs are as against your actual costs. Mine vary enormously as I only use childcare in the holidays. You can update it on a weekly or a monthly basis but keep it up to date and check it regularly to see if you need to be in touch with HMRC.
If your estimated and actual costs are varying significantly you need to look at it again and advise the WTC/CTC people accordingly. But if the worst comes to the worst you should have the money in that separate account to pay it back if you have over estimated.

Any time you change childcare providers re calculate your estimate based on the new costs/arrangements. You say this is what seems to have caused the issues last year so you now know how important it is to do this.

I don't want to teach you to suck eggs if you already do all this. But if you'd like further help on how to keep tabs on the budget and with estimating the costs then PM me.

And hard as it is try not to stress. This is somethign that is within your control so you can deal with it. And you will sleep better for it if you're anything like me! :)