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Original poster

Friend been caught defrauding tax credits

114 replies

Adviceinscotland · 21/07/2012 16:10

Friend just called me in a right state. Has been sick etc. had a letter from hmrc this morning saying they have found out through credit files that she is not a single parent and has been claiming as one.

She has a month to call them and explain herself.

As far as I know it has gone on for a few years.

My sympathy is very limited but I know how skintight they are and that she has used the money to live not for luxuries.

Just wondering if anyone can give me some idea of what may happen to her.

As far as I can make out we are talking thousands

OP posts:
JollyHockeyStick · 21/07/2012 18:22

Citizens Advice or a solicitor. She really needs legal representation but I'm not sure what financial support she'd be entitled to with that if they do have a wage.

DaisySteiner · 21/07/2012 18:26

With tax credits I'm afraid it's not just a matter of paying it back but they will possibly also impose a penalty which can be up to £3000. Have a look at this page From the information on there I think that it's unlikely that they will prosecute, although obviously it's possible. I think she should possibly take advice from the CAB or possibly a solicitor about the best way of confessing and possibly claiming mitigating circumstances due to her partner's illness.

saintlyjimjams · 21/07/2012 18:39

I was overpaid tax credits by a massive amount (not fraudulent - they cocked up, I kept telling them, they kept ignoring me). Eventually they stopped after they made a one off payment for thirteen grand(!!!) into my account and I rang them and begged them to stop paying, this came after I'd sent letters and made repeated phone calls and had spoken almost weekly to them for three months. Initially they stopped my tax credits and took that money as repayments. Then we were no longer eligible to receive them so they sent me a demand for the whole lot. I rang them and said it was too much for me to pay at once so I now pay a monthly amount.

I think legal representation/advice would be wise if it goes to court as would budgeting how much she can afford to pay each month and then offering that (when I rang they basically asked me how much I could afford). As her circumstances sound complicated, and tax credits really are a shambles (in our case the overpayment occurred because they randomly dropped a zero off dh's salary one renewal) she may be able to claim an oversight especially if she shows immediately willing to pay back.

Original poster
Adviceinscotland · 21/07/2012 18:43

I'm glad it looks like it will just be her in trouble and not the dh who as far as I know is innocent.

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saintlyjimjams · 21/07/2012 18:52

Honestly she may well not be in trouble. If she rings and says she's sorry but her partners illness meant she completely forgot to notify them of change in circumstances, how can she pay them back, she may find they just get stopped for repayment.

Ok it's not great but it's better than court.

The trouble with tax credits is finding someone sensible to talk to. In my case the weeks and weeks I phoned I was told x,y and z had to happen for payments to stop. When I eventually rang and said 'you have just paid thirteen grand into my account, it is not my money, I do not want it, please please stop these payments I beg you i have phoned repeatedly, i have sent recorded letters' the woman on the other end said 'oh whoops yes I can see that, will stop that right away and your tax credits will be stopped for repayments'. Well why couldn't the ten people I spoke to in the preceding weeks do that?

Original poster
Adviceinscotland · 21/07/2012 19:00

If it's been going on about three years she must have renewed at least twice with false information.

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Jemma1111 · 21/07/2012 19:03

I can't see how your friend will get off lightly as they will take into account the fact that she may have possibly carried on for many more years falsely claiming had she not been found out .

EdithWeston · 21/07/2012 19:22

As they have found her out (rather than her noticing a mistake and coming clean pre-emptively) and as she must have made false statements on two renewals, I'm afraid it doesn't look good. Had it just been the first year, she might have faced only civil recovery, but the false declarations make criminal proceedings a real possibility.

Her best (only?) course of action now is to come clean to the authorities, but she should seek legal advice too.

I think she will also have to consider biting the bullet and telling her partner. He is likely to notice (from her stress levels, as well as arrival of further paperwork and possibility of hearings) and she needs to think hard now whether she can really cover up effectively (I doubt it) and whether his reaction will be worse if he catches her out in a persistent lie.

I am sorry to lay it out so starkly, but hands up and take the penalties may prove better in the long run than an attempt to cover up.

Original poster
Adviceinscotland · 21/07/2012 19:41

I have just read the letter they sent her, am surprised at how civil it is considering what they have accused her off.

It says though that it is only for the 2011/2012 claim but I suppose once they looked into it more they would see he was living there before

Also

It says if she does not get in touch they will stop her tax credits but it does not say that they would pursue it any further after that. I'm clutching at straws here for her though aren't I?

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saintlyjimjams · 21/07/2012 19:45

Oh yes, if she's actually written down and checked as correct false information that doesn't sound so good.

CogitoErgoSometimes · 23/07/2012 09:06

I think the best advice you can give your friend is to be honest (for a change), 100% open with information and cooperative. CAB or a solicitor may have other ideas but I'm pretty sure HMRC have heard every sob story in the book. If she tries to deny anything, plead ignorance (which is no defence), or wriggle out in some other way then it's likely to make things worse and they may prosecute for fraud. She's certainly going to have to pay the money back.

RedHelenB · 23/07/2012 09:45

With three children & a partner away then she really won't need to worry about prison. BUT, if they do look back further then she will be in trouble so I think other advice is spot on - get it sorted & a plan put in place to pay it back.

Jemma1111 · 24/07/2012 16:27

Hows your friend op , has she told her H yet ?

Original poster
Adviceinscotland · 24/07/2012 18:01

No she has no plans to tell him!

Am going to cab with her tomorrow.

Her dh thinks she has had a sickness bug the last few days and that's why she has been so ill.

Not really sure what to expect when we go to cab? It's a drop in session as all the appointments were taken.

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SilkySmith · 24/07/2012 18:04

this happens fairly frequently on my local NM boards Hmm
they usually have to pay an affordable amt back each month

Original poster
Adviceinscotland · 24/07/2012 18:09

Is that people making a mistake in the forms though slinky or people lying on purpose?

I don't for a minute condone what she has done but it's not nice seeing someone I like in other ways constantly dry retching as she has only had a slice of toast a day since Saturday.

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SilkySmith · 24/07/2012 18:13

nah it's people claiming to be single when they're not

I find tax credits very reasonable if you are open and honest with them, they'll try to work with you if you volunteer as much info as you can. IMO if she says that she is eager to pay it back then they will probably agree to just a repayment plan, but if she burys her head in the sand and doesn't contact them ASAP they might take a harder line

Original poster
Adviceinscotland · 25/07/2012 10:10

In cab with her just now

If this does not give her a kick up the arse nothing will.

I feel like a bit of dirt and I am just supporting her.

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SilkySmith · 25/07/2012 10:18

that's terrible that you feel that way in there!, CAB are meant to be on your side?

what did they say?

Original poster
Adviceinscotland · 25/07/2012 10:21

He is away getting advice after getting all the info.

I can hear most of what he is saying in the next room so quite sure the whole waiting room can Confused

Friend trying not to be sick and I am trying to distract myself on here!

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Original poster
Adviceinscotland · 25/07/2012 10:23

Hang on!

Maybe it isn't his voice after all.

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PerryCombover · 25/07/2012 10:32

I think that if she's straightforward they will work with her to sort it out.

I hope that she's okay.

Original poster
Adviceinscotland · 25/07/2012 10:36

She is not ok at all actually I'm worried for her mental health a bit (no previous problems in this area)

She is sat with a nappy sack to be sick into. The guy came back said she could likely be prosecuted then went off to talk to his manager again to find out if they are allowed to call tax credits on her behalf even though it says in the letter they can.

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CogitoErgoSometimes · 25/07/2012 11:22

To be fair to the CAB people, they have to give your friend the full story, warts and all. When you're talking about fraud, there's no nice way to dress it up and they'll have to mention things like prosecution because it is one of the possible outcomes. The unknown is far more frightening than having the information. She may feel better once it's all out in the open.

Original poster
Adviceinscotland · 25/07/2012 12:38

Complete and utter waste of time.

Feel heart sorry for her now.

After 1.5 we were sent away in the same position we started in.

She poured the whole story out which was written down and he put it in the bin infront of us as we left.

He could not get through on the number and has told her to call up but take their lead about dates. When I questioned that surely she should just confess he said that was up to her.

She practically begged him to try the number again before we left but he told her to try herself from home.

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