Tax credit overpayment

[Curious0yster]

Hello Mumsnetters, I was hoping for some advice please.

Up until September 2018 I was a full time student and my husband and I were in receipt of tax credits. I started full time employment and my husband's income increased in September - I advised HMRC of this immediately and my payments stopped as expected. I have completed the renewal and have heard back today that the entire amount we received between April and September was an overpayment and must now be paid back - it is £4000!!! I understand that our total income for the year means we wouldn't have been entitled to any, but we were entitled to - and needed - what we received when we received it. Is this really right?? I know it probably is, it just seems complete madness to plunge people into instant debt as soon as they start to be able to have financial independence. What happens with overpayments - are they going to want it back all in one go??? Thank you!

Child tax credits are a disaster, overpayments seem to be built into their operating model. Even when you update them every time your situation changes and the mistake is theirs, they will just shrug their shoulders and say 'that's the system'.

They will demand immediate payment, then hound you and send you threatening letters and then eventually will agree that you can pay it back in instalments. It's a nightmare. Sorry.

I agree with the above. The system is designed to set you up to be overpaid and they expect it back ASAP.

I have had overpayments in the past and they basically stopped all my payments until its cleared. They don't even ask they just do it.

I agree though, at the time you were entitled to them. It's not fair that if what you earn on a part year takes you over the amount they want it back, but how can you possibly forsee your income increasing over the year. It really isn't fair.

This year I am hoping for an underpayment but it's been an absolute nightmare. I renewed in June at the beginning, following 2 packs being issued. Was confirmed as received and today I get a text to say my renewal is incomplete. I call to find they are trialling a system where 'robots' are working our cases. So she has taken my details over the phone and I need to wait a further 8 weeks for an outcome, in the meantime I am 200 a month down because they believe I have been overpaid. Which I haven't. It's so bloody frustrating

We had this, you do need to pay back but can request to do it over time

Thank you!! I thought as much, but how bloody annoying!! How harsh are they on repayments? I’ve visions of them trying to make me pay it all back really quickly 😩😩

I had exactly the same student till sep then got a job. It seems that due to my earnings from the sep to the following April I shouldn’t have been entitled the year before so had to pay everything we had been paid from the apr to the sep (I.e when I was a student).
I agreed to the lowest amount of repayment which will take 10years in total, there’s no interest added and it’s not on my credit file so they can carry on getting it in a small amount monthly.

Tax credits have been hell on Earth. I wish I never applied for them and sure I’ve paid back more than I ever received. Just when I think I’ve finally paid it off another letter drops through the door about overpayment - last one arrived on Xmas eve demanding immediate payment for an over payment of thousand from 5years ago! The letter was from dept collector and gave me 5 working days to pay it. They were nice when I phoned and put a hold on account for a month while I appealed - I still haven’t heard back from appeal, I get another demand letter every month and have to phone again.

Threads like this frighten me. I hate receiving tax credits. How can the chase debts for previous years when they finalise every year? It really worries me. Especially when the final award will state an overpayment or underpayment or 0.00 due how can they chase for anything other than from the last tax year

The overpayment can happen if you do a load of overtime, get unexpected bonuses, promotions or even a better paid job elsewhere.
For example you may say i’ll Earn 10,000 this tax year, then just by doing some overtime you actually earn 12,000, you then get a bonus and you’re onto 12,500, take a promotion and actually end the year on £15000. So your benefit was worked out on 5000 less than your actually earnings.
I was a student till the Sep so had nil earnings, did not know in the Apr if I would actually qualify and/or get a job so had to say nil income. Was lucky enough to get a job straight from qualifying and actually earnt £12000 in that tax year.
I notified them in the sep and my payments stopped as far as I was concerned that was all finished and had been grateful for the financial help. I wasn’t expecting In the Apr to be told I hadn’t been entitled to them because my income had been more than I’d declared and shouldn’t have received them.