Tax credits overpayment ....what can I do

[wrinklytum]

Owe them approx 2 grand.They made an error and had dps income as five grand!!!Any advice??

No advice just sympathy.

We supposedly currently "owe" them about £3.5k too, all their fault, two different claims and I have about had enough. I have proof I told them of a change in circumstances they just didn't take it on board (approx £500) and they kept paying me when DP moves in (£approx £1200) which they say is £3k FFS!

Fight them all the way if you don't think you should owe anything. The system is so f*k up that they haven't got a clue. They know it's wrong but they can't/won't do anything about it.
Good luck.

Thanks for comments.

Are they have a blitz at the tax credit office. I got a phone call at work from them this morning saying I owe them £495. 25p as overpayment from April 03 to April 04. They said I didnt inform them of a change in circumstances.... I cant think i've had a change in circumstances at all.

Wrinklytum - I can beat that - we've just received our tax credits notice saying we owe them at total of over £6K!! For the last two years DH and I were both self-employed and our 04-05 income was pretty low (I was on maternity leave for 6 months of it). I knew we'd end up owing something but am in shock at the £6K!!! I have always kept them informed of our changing circumstances but they always say "When you know exactly what your income is for the year, let us know" - well I still don't know exactly what our 05-06 income was as the accountants haven't given us our books back yet!

What annoys me is that, as a self employed person, you often have no idea what your income will be for the year yet they base your payments on a figure you give them before you start earning it! I guess it's the same if you're employed - what if you get a big pay rise or anything?

I just know my DH will go mental when he hears this in about half an hour's time but what could we do? They gave us the money, we didn't ask for it - how do they claw it back?

I am going to tell them fine, you pay us nothing till the debt is paid off according to what you calculate we should be receiving now. If they think we are actually going to go further into debt to pay it back, they they can whistle.

What pisses me off is that I am going to have to spend most of a working day this week sorting it out. What a f*ing stupid system.

bump...anyone ever been overpaid by as much as 6K? If so, what happened?

That happened to us they normally stop payments til its paid back or reduce it. Don't think you need to pay it back in full.

meant reduce payments not what you owe unfortunately

We have the same problem - we received a letter Friday claiming we owe them £3.5k - does anyone know what we are supposed to do, or what happens next. We aren't due any payments this year, as my pay went up, so we're really worried abot how we are supposed to pay £3.5k back

TBH we only just keep our heads above water as it is, so are really worried about this

Well I can nearly match you wordsmith we've been overpaid just over 5k.[BLUSH] ! I'm appealing, as should you wrinklytum, You just ask them to send a form. Apparantly if you can prove it was their error and that you weren't to know it was wrong, you don't have to pay it back. It seems that they managed to ignore Dh's income completely when calculating payments - TBH I had expected a hike because I earned much less than in the previous year and although I knew I was getting more than a friend of mine I knew we earn much less than them too.It's all a bit of a mess really, but I gave all my info over the phone at the correct time and they tell me they record all calls, so it should be easy to prove. If they don't publish the formula for how they work things out then how are we supposed to know if its correct or not? Anyway we're back on what we should be getting while they investigate.

I can't prove anything - I just don't see how it's supposed to work when you honestly have no idea what your annual income will be until the year is over! I could have been on the phone to them every month telling them what we'd earned, because it was different every month, and I don't know what my pre-tax profit is until my accountant's done my books! Even now, when DH and I have jobs with salaries, DH will still be earning commission on top of a smallish basic salary. So if we calculated on his basic salary, our joint income would be low to middling - but it could be high, if he had a few good months! How the hell can we take that into account when we have to tell them upfront?

Hoohoo I'm hoping that's what they'll do - reduce payments rather than claim it back - although it probably means we won't get any tax credits for about 10 years! The point is we are really going to be scraping by even on a regular income - our self-employment over the past few years has provided a pretty meagre income and we've had to pay for clothes, holidays etc on credit so have a lot to pay back. Losing the £300 a month we were getting from the tax credits people will really hurt. But what can we do?

Wordsmith - we're in excatly the same situation as you - only just surviving as it is

My chimdminder said they can't force you to pay more than you can affored to. If it went to court, they'd have to accept what you say you can afford to pay, although as you still receive payments, they'll probably just reduce them.

It really makes me angry

They've just f*cked mine up too -just spent 30mins on the phone trying to get someone to tell me why (and failed)... Not to the extent as detailed here but we have only just finished paying back (by accepting reduced payments) the £8k they overpaid us 5 years ago . That was back in teh days when I just let things like this ride. Not this time mate. Off to start another thread about it as I have abit of a different question.

I think you may only have 30 days from the date of the last letter to appeal though. Ring them and tell them you want to dispute it.

Agree with other posters though - have just got this off the hmrc website wrt my own problem:

Q. Do I have to pay a fine/penalty/interest?
A. You must tell us about any changes to your work, childcare or household as quickly as possible. If you don?t tell us, you may receive more money than you are entitled to and you might have to pay back the money as well as a £300 penalty.
These changes include:

You and your partner stop living together as a couple and you had been receiving joint tax credits
You start living with a partner as a couple and either or both of you had been receiving tax credits separately
You stop paying for childcare for at least 4 weeks in a row
Your weekly costs for using childcare reduce by £10 a week or more for at least 4 weeks in a row
There is a change in your working hours
The number of children for whom you can claim family support changes.

Q. If I have been paid too much tax credit, how much money am I expected to pay back?
A. If you told us about any changes to your work, childcare or household as quickly as possible and we did not do anything to change your tax credits, so you have received too much tax credit, we will not expect you to pay back the extra money you have received. However, if you do not tell us about a change within the given time, we will expect you to pay back the tax credit overpaid.

Q. If I have been paid too much tax credit how will it be collected from me?
A. Normally if we find out about the overpayment in the same year we will try to get the amount overpaid back by reducing your tax credits award for the rest of the year. If this is not enough, we could adjust the next year's award. If there was no further entitlement to tax credits we could adjust your PAYE code or look at other normal ways.

2Plus - what do they mean by adjusting PAYE? Do they mean collecting it by charging more income tax?

I don't really know Fatfox - I just copied it off their FAQs section. I guess your right. Afterall Tax credits are essentially a 'refund' of income tax you have paid.

IMO better than asking you to send them a check for £3.5k by a certain date...

dont they just f**k everyone up, to us they said we owed them money then we realised they hadnt paid dp the work part in wages so in fact they owed us money!! it was all sorted they said we owe you nothing you owe us nothing, ds is SN so we get extra for him then 2 months a go we got a letter saying you owe us us money they have now dropped our money from £110 a week down to £35, how the hell are familys meant to manage we just about budget what we have then that means not paying all the bills and getting into debt

I didn't think they paid it in the payslip anymore - I thought it was all be bank credit?

Its actually £4.5 k - overpayments over two years (I did tell them income etc). This works out at £187 pre. month, which is more than they ever paid us monthly during that period ? Eh?

Anyone know ow where we can get some good advice on this?

yes this was 2 years ago they tried to say they over paid it to us but when we looked back on dp wage slips it wasnt paid in at all, its all to bloody confusing and it does my head in, anyhow we are now over £60 a week down

In my case they reduced the payments for 4 years. Just lately they seem to be stopping payments until debt is clear.

I was paid £1.04 testerday (woopee) and they say they are not going to pay me again until Oct 2007

Unfortunately for us, we've just gone above the limit so our payment is £0.0 anyway, which is why I'm so worried about this £4.5k they claim we owe them

Sorry, what I mean is, if they can't reduce our payments - how will they claim it? We certainly can't afford to make THEM payments!! Specially when they've just taken away all our tax credits anyway

Go to the CAB or your local MP's surgery and ask them to help you request that the TCO reconsider recovery of the overpayment and provide you with a written explanation of how they reached their decison you were overpaid & how they calculated the overpaymentif their is anything you do not understand. MP's have a special hotline to the Tax Credit Office and seem to get answers more promptly, also it is good for them to know about all the problems people are having so that they can lobby for the system to be changed.

Rian, that's really useful. Thanks I'll try BOTH those things. I was really worrying about it last night and couldn't sleeo.