Childs Tax Credit overpayment - advice please!

[nooniem]

Hi, am brand to mumsnet, so please forgive my newbie errors!

I have disputed a childs tax credit overpayment for 2013/2014 year, and would just like some advice please.

At the beginning of the 2013 fiscal year, I had 3 children in education and college, and one 4 year old for whom I paid a registered childcare provider. Our joint income was approx. £40k. I paid £800 per month childcare.

One by one during the year to September my 3 in childcare all left education (they are much older than the 4 year old!) and I advised HMRC everytime one left college etc, within 1 month of them leaving, and my award was reduced accordingly.

In the November I was subject to a compliance check from HMRC for my childcare cost, and I received a letter on 19th December confirming that my award was correct and I was in receipt of the correct amount of childs tax credit.

At the beginning of December I secured a new full time position which was a much bigger salary, adding £30k to our income, hence now £70k. I called HMRC on 5th December to advice of my new income. the next correspondence from HMRC was the compliance check on 19th December. I received my last HMRC child tax credit payment on 15th December, and the award was closed. My childcare ceased on 31st December, and again HMRC were notified of this on 2 Jan 2014.

I am now being pursued for the full amount of childs tax credit I received for the full year, however, my dispute is based on that from April - December 2nd I wasn't in receipt of the additional new salary, but was paying £800 per month childcare. and as soon as I advised them of my new salary they ceased child tax credits and then wrote to me to confirm that I had been in receipt of the right amount of childs tax credits as per 19th December. Hence, I do not feel that I should repay the overpayment as I kept them informed all year about all changes in the right timeframe and even after investigation a compliance officer agreed I was receiving the correct amount.

Any advice is greatly received - I now have debt collection agency letters too, which is distressing!!

Did the compliance check include asking for proof of income or just proof of childcare costs?

When you received notification that your claim was ending did it have any figures on there about your entitlement for that year based on you increased income?

Hi mrsminiverscharlady - the compliance was a full check of income and childcare costs and when I received my notice to confirm my award had ceased it was after my compliance check letter, and it did include my increased income. I think you may have made me see my case a bit differently based on that date.......

andyesididmeantobethatrude - sorry to read about your nightmare year - genuinely hope things pick up for you... The thing for me is that HMRC are useless at communication within its own walls, the left doesn't know what the right hand is doing. If the compliance letter stated on what facts my investigation was based on then I would have no argument, but I guess you're right it is a red herring (after reading the comments, and especially the date of the final notice to cease paying me tax credits), but HMRC departments do need to up their internal procedures to make sure everyone is singing the same tune! Please don't be jealous of my income, it lasted 6 months, and am onto a new phase now!! still don't qualify for any credits though! But heres one to make your blood boil - an associate of mine 'inherited' £140k, and in 5 months had spent the lot and is now seeking disability and housing benefit.....now that I do not support in any form!!! Good luck :)

how vulnerable it makes the claimant because we advice HMRC when our money increases but it only comes into play months later at the year end, when they do an annual round up! Maybe they could do quarterly or half yearly awards, so they are confirmed in a smaller timeframe!

But this is the thing - there used to be a disregard if income increased by up to £20k in-year (scrapped by ConDems), and that worked better than this. So there wouldn't have been many cases like yours under that system. You've had an unusually big rise though.

It's interesting to consider the alternatives. Shorter claim periods would be hard work, administratively and mean near-constant renewals for claimants. The argument for an annual system was that it would be 'light touch'.

Not that any of that helps you ATM.

At what point did you realise there should be an overpayment (regardless of what the compliance chap said)?

As with all hmrc matters the obligation is on the individual to know what their tax situation us.

At the beginning of December I secured a new full time position which was a much bigger salary, adding £30k to our income, hence now £70k

Or do you still not agree that there should?

There was only a month at the higher salary included in the claim period.

It isn't clear exactly what the salaries are of course....

Can I just point out that no ones claim can be "finalized"part way through year.

Finalization takes place at the end of the tax year when everyone in the whole country who is PAYE receives their FINAL income figures for the year hence the term finalization. (Renewals- done after p60's)

Your compliance checks will have looked at either full time education/employment/hours worked or childcare.
I assume they found that what they did check was correct.

If your income was checked it will have been checked against the most up to date RTI information to hand- which was of course your lower salary from your previous employer.

HMRC are entirely in the right here- award notices(and telephone advisors) state "if you underestimate your current year income you may be overpaid, and any overpayment will need to be paid back"

You did underestimate your income- you weren't aware you would get a higher paid job but of course nor were HMRC.

They paid you for 9 months based on YOUR estimated figures, they can only possibly check that this is right at the end of that tax year and not at any point before

Hello OP

If we have been overpaid they will take it off us, I'm in a similar position but add in debt agency too, who are lovely but can't help until HMRC tell them to wipe it clean. HMRC can't do this until tax credits tell them the outcome of review they say feb.
They closed my account because I didn't give them figures in time, this was because the law changed regarding final dates for business/ self employed.
Scrambled accountant together when came back from holiday, missed deadline, called immediately for computer to say no. Oh and she coughed in my face.
They have taken 5 months of constant reminders ( I have records)
Have finally got to speak to a manager last week.
Its shit OP xx

I knew that my tax credits would be affected when I got the new job at the beginning of the December, and called them to notify them on 5th December, so it was just December, my tax credits stopped immediately in the December.

My income was provisionally £10k for the annual claim , and after starting the new job my total income for that year was 40k,i advised HMRC our joint income for the year would be £70k, my DH being the other £30k, hence a £70k income. My annual salary going forward was £70k from april 2014, which I believe is irrelevant as I was no longer receiving tax credits.

Hope this makes sense! Hmrc did question when did I know that my income was going to be £30k more, and I confirmed it was just the few days before I called them with employment details such as paye ref etc. I didn't delay at all in advising them of any changes at all during the period.

It all makes sense, they key issue is the timings and your understanding.

Your income at April 2014 is the absolutely key here- this is used to check and finalist your previous years award.

Your initial figure (April 2013) made you entitled from then until December- at that point you said your household income would be 70k- this is the first time HMRC have had this info, so they stop your tax credits immediately knowing your estimate is well above the threshold. Think of it as damage limitation.

At this point all income is estimated- what if one of you had lost your job 2 days later and your income never actually went to 70k?

It is only at the end of the financial year when all income is reported to HMRC that they can say "ok, Mr and MRs nonniem actually earned 70k", had we known that a year ago they'd not have received the tax credits at all.

But of course no one can know final figures, obviously it's easier for some who have been in same job for years but HMRC can only act on info provided to them

It's easy for me to understand- I work for HMRC tax credits specially but honestly, if I thought for a single second that HMRC were in any way wrong or that I thought you had an issue worth taking forward I would say x

Can I just point out that no ones claim can be "finalized"part way through year.

Hence the 17 week 'delay' until new financial year? I didn't realise. Obvious now you say it.

Honestly OP. Read what Totes has just explained and my post of 15.21.

There is no mystery or issue.

arsenic yeah, TC renewals are done between April-July to allow employees the chance to actually revive their P60 info and report to Tax Credits by 31st July- this is around where claims are finalized- incomes will be checked as can the other things mentioned in my previous posts.

Real Time Inforamtion has been added to the mix in last year, basically Tax Credits systems are fed with RTI incomes from the PAYE system, sometimes even before a P60 is sent, still the same principle(and provided the RTI is correct, which sometimes it's definitely not!)

Totes I do not envy you having to try and explain this stuff to people. I've just skimmed back over us all tring to explain it to each other with varying degrees of grasp and it's hilarious.

What about the problem Morethanpotato describes with self employment? Is that a result of the real time, PAYE thing? (This is unforgivably dorky for a Sat night )

totesnamechange - fabulous! exactly what i have been after - someone from HMRC! Sorry if my post criticises your colleagues!! I think a lot of my issues and frustration is that HMRC expect claimants to know all the internal procedures and whys and wherefores and so when i speak with them i cant understand who does what, and why different information is being used by different departments, if that makes sense. However, now it makes sense that we could of also lost our job days later, hence the annual declaration to summarise the year. Your comments on here have been far more informative than the lengthy calls ive had with HMRC, thank you!

I'm due to hear from HMRC shortly as i called the other day for an update, so will wait to hear from them.

thanks :)

X post

Glad Ive helped- it's really not the easiest thing to grasp, even now I refer to manuals and guidance daily.

I think you were looking at it from a year ahead rather than behind?

Am sure some HMRC staff are arsehole btw, I work with some of them

I'll read back, if I don't come back it's because my knowledge is lacking that department

ha ha Totes! The lady from Dundee i spoke with was horrendous, wouldn't let me speak and when i did speak she said i was interupting her and she threatened to put the phone down on me... and kept calling me 'maam', and wouldn't give me her name so she continued to just talk over me all the time....it was very frustrating and emotional to be honest!! worse than having a row with DH!! Im not known to shout or swear and have pride in how i deal with people but she really got to me! Was very tempted to make a complaint about her due to her conduct, and as the call was recorded it would not have been good for her, if HMRC deal with staff complaints....x

Just make a payment plan noon and have a

Ok, can't comment on mores individual circs without more info but Self employed Tax credits should do the following:

Provide at least an estimate of previous year income by 31st of July, they will then (usually) be given until the 31st January the following year to provide actual net figures. At this point the tax credits claim will be finalized.

If no estimate is given then a claim will terminate, usually you have 63(!) days to provide a figure but once a claim is terminated this figure MUST be an actual. This is obviously tricky for SE customers which looks like it may have been the case for more

If claim is terminated at 31st July then all payments THAT year(from April onwards) are treated as an overpayment.

It is possible to have claim reinstated after those 63 days, if an actual figure is provided but there must be 'good cause' for the late info- this is down to Tax Credit office staff to decide.

Does that make sense?

They do take them seriously nooniem, at least they do at my contact centre.

Which thankfully isn't in Scotland!

I'm not 'front line' tax credit helpine staff anymore but work on a team which provides cough cough enhanced support to vulnerable customers.

I do deal with more intricate queries too, which lets face it there are many!

Totes you explain it much more clearly than anyone else does

You still about more?

I haven't read all the replies... However. I was been overpaid...They had 2 claims open. I kept telling them they couldn't close. I had to follow an appeals process which point they actually did agree that they has 30 days to make changed form when I informed them and they had not done that so I could keep the extra money.

its easily explained to lovely ladies on the Internet in my own time with glass in hand.

Compared to dealing with 70+ calls a day whilst being called a "stupid fucking Geordie bitch"

"stupid fucking Geordie bitch"

Nice