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Original poster

Tax Credit overpayment

23 replies

Theclosetpagan · 29/08/2007 17:17

We have just had a letter from the Tax Credit people saying we owe them £1675.27 due to overpayment. They say we can pay it back over 12 months if necessary but this would be virtually £140 a month. Even working it out over 24 months makes it £70 a month and I can't afford that either.

DH is self employed and it's really hard to work out what his income might be in any given year - he's an actor so sometimes the income is good and sometimes it isn't. Last year his income was £6.500 and this year was about the same. My salary is around 17k and it seems that between the two of us we've earned just over the threshold where the amount paid drops.

Are they understanding enough to accept that we just cannot afford to pay this amount each month? How much of an offer will they accept - at present I could do £50 a month max. When the bills are paid and the shopping has been done there is honestly not very much more than that left. Is it likely that if I just send the £50 a month and say "sorry but that honestly is all I can afford" will they accept it? Have heard some horror stories where they have taken people to court. Am honestly beginning to think that tax credits are just not worth having.

OP posts:

Original poster

Theclosetpagan · 29/08/2007 17:18

Will they allow me to send back the £40 a month that they usually give me now. The over payment was for year ending 2006.

OP posts:

Nymphadora · 29/08/2007 19:20

Are you sure their decision is right? they aren't always. I have paid back by being deducted from my current payments.

charliecat · 29/08/2007 19:22

Has it gone straight to the overpayment people?
I have an overpayment that I cant afford and they said Tough You have to pay, if they wanted you it taken out from your award they would have done it like that.
They may take the £40 award if it hasnt gone to the overpayment section.
Well.....thats what they told meeeeee anyway.

Sam100 · 29/08/2007 19:29

Be sure they have got the assessment right first - keep going back to them and ask them to explain how this overpayment has arisen until you understand.

See this charity if you need help - they have a page on tax credit overpayments and how to deal with them TaxAid

Have you kept all your notifications from the Tax Credit people? I think there is something that if they have notified of you of amounts that seem reasonable i.e. they are paying you for the right number of children, an amount that seems "right" and you keep them informed of any changes to circumstances - that if they do not then act on that info that they cannot unreasonably demand repayment. If the overpayment has arisen over a long time period then it would be reasonable to ask for the same time period to pay it back.

Original poster

Theclosetpagan · 29/08/2007 20:00

Doesn't seem that good then. It's for the year ending April 2006 - looking back at the award notice it seems that they have got their figures correct. We've notified them of any change in my income but it's hard to know what DHs will be in any given year.

Persoanlly I am going to ask them to take the £40 I would have been paid and I'll add £50 to that making it £90. It will be a struggle though

Bloody Tax Credits - not worth the fecking hassle - esp if self employed income to take into account.

OP posts:

twinsetandpearls · 29/08/2007 20:18

I have had three overpayment letters this week
1- you have been overpaid but because we stopped your payment last year and will do so next year there is no need to pay
2) you owu us £1900
3) you owe us £5000

I have never received £5000 worth of tax credits since they started!

charliecat · 30/08/2007 09:33

im on the phone now. my over payment has tripled since last week.

nappyneeds · 01/09/2007 23:17

I would ask them to explain exactly how this happened, then i would appeal - which could delay them claiming back their money and then if you have to choose the 12 month option. If you cant do it in 12 months they will want to see ALL your income/outcome, bank statements etc and you would have to prove that you really couldnt afford to pay it back.

I had this problem a couple of years ago. They wanted £2000+ back for THEIR mistake - i was a single mum at the time. I spent ages on phone sorting out, finding out why etc and eventually appealed. Afterwards I gave up phoning as I became busy and just assumed theyd take quite a while dealing with it. Then one day I got a phonecall from Inland Revenue and Customs - telling me i have to pay it all back straight away. I mentioned the appeal - APPARENTLY there was no record of my appeal letter! Funny that! And that it had now gotten to the stage where I had to pay it and couldnt appeal. I am still paying back £230 per month and hopefully only have a couple of payments left before it ends .

The trouble is they now dont supply you with the rates etc to be able to work it out (back in the early 2000 years they did and you could figure it out yourself).

I ask - how are you supposed to know youre being overpaid if you cant work out what you are supposed to be receiving. Plus if they got it wrong the first time how do you know they havent got it wrong this time!

CSA are just as incompetant! Surely Maths and a good head for logic etc are prequisits for these types of jobs one would think!

Steward · 03/09/2007 11:13

We got an overpayment a few years ago. What they did with us was work out our annual tax credit amount. then work out a percentage of it 9think about 20 to 25 percent). They then kept that percentage and gave us the larger percentage. Therefor we are paying it off by paying abit off each year.

Last week we did get a letter off them saying that they we were review cases regarding certain tax years due to incorrect procedures and that we wereone of the few cases that was being review. The tax years in question is around the time they over paid us. We are now waiting to see what happens. Hoping that they tell us we don't have to pay back the remaining money we owe.

There was a mention on tax credits on GMTV this morning but didn't see all to find out more.

clayre · 03/09/2007 11:23

on gmtv this morning it was something to do with the way the overpayments were taken back, apperently they didn'r follow the right procedures so if you were overpayed and they took the money back you may get a refund! we owe them about £5000 apperently .............. i wont hold my breath for any refund!!

Steward · 03/09/2007 11:53

Thanks Clayre. It explains abit more. We got overpaid by about £3000. We now owe only about half of that. Lets hope they just write off the overpayments so that no one will have to pay it back.

nappyneeds · 03/09/2007 23:05

darn..... i have one/two more £230 payments to make before my overpayment is finished. Bet theres no chance of me getting it back either!

Sam100 · 07/09/2007 16:24

About the stuff in the news this week to say that the overpayments that IR have been demanding may be illegal.

See this article.

If this is right then you will probably find advice go up on the HMRC website soon.

Nemo2007 · 07/09/2007 16:29

we had this in 2005 and they stopped payments. Now they take money from amount per month despite iva being in place since feb 2006. So we now pay them twice feckers the lot of them

evenhope · 07/09/2007 17:24

How on earth can you be overpaid by thousands? We were overpaid the year before last (by a hundred or so) but my DH is paid weekly and different amounts each week so I couldn't work out exactly what our earnings would be. Aren't most people paid more or less the same each month?

Wordsmith · 07/09/2007 17:43

This is so familiar. When you are self employed you often have no idea what you earned in a tax year until at least 6 months after the end of that year. Last year in the space of one week I had three letters saying we had been overpaid by £6000, £4000 and then £2000. We had not changed the information we sent so I have no idea how they changed their minds three times in three days.

Can't understand why they are not deducting the so-called overpayment from your future tax credit payments? According to my accountant the only reason they would demand you pay it back is because you no longer receive tax credits, ie your income goes above the tax credit threshold (about £60K).

I would query it anyway. There are so many cock-ups it's bound to be wrong. If they still refuse, tell them you'll see them in court.

Wordsmith · 07/09/2007 17:43

Evenhope, no, not if you're self employed.

SleeplessInTheStaceym11House · 07/09/2007 17:50

they tend to take it out your current payments unless its a seperate claim (from single to couple/couple to single) in which case you have to repay

we were overpaid on my single claim and are still paying back, we were overpaid on the double claim and its being taken out of our payments now!

Bouquetsofdynomite · 07/09/2007 17:57

We owe them £8k due to their typing error (clearly missed a digit on DH's salary), tried to pay it back immediately but they seemed happy to have a huge hole in their cashflow and just don't pay us our entitlement. It would take 8yrs to pay it back but we may have another baby one day which would make more of a dent in it. Luckily we don't really need the tax credits, they were always a bonus for us. We spent our overpayment on housemove fees!
Just had a letter saying they are reviewing cockups and ours is one but it won't mean us having to do anything (like Steward) I suspect they may even write it off!

SleeplessInTheStaceym11House · 07/09/2007 18:02

evenhope, theres also the fact that if your income goes up one year (ours did by 5000 of commission) then they will have overpaid you all year and recieving 200 odd quid a month then that can add up to a thousand or so!

clayre · 07/09/2007 18:04

we are like you Bouquet, hoping everyday for the letter they say they are reviewing cock ups, i hope ours gets cleared!

Original poster

Theclosetpagan · 07/09/2007 18:09

We've just done an income and expenditure form but it's not good. Think all we can possibly afford is £50 a month. My income is £1100 a month and DH is £500 and we have £70 child benefit plus £40 tax credit (providing we haven't been overpaid this year as my salary has now gone up).
By the time we take out rent, council tax, electricity, water, phone, childcare, petrol plus housekeeping there's not a lot left to be honest. I can only do the £50 a month by taking it out of other areas. Really pissed off about it all. Can prove my income to them but not necessarily all expenditure. Have a health condition which means I need to add another £15 for prescription costs and I need some dental stuff doing too but may have to put that off.
Just honestly think tax credits have been more trouble than they are worth if someone is self employed in the family.

OP posts:

EmmaJW1976 · 07/09/2007 18:58

Don't get me started on tax credits!!

When my new partner moved in (in 2004) I phoned up and told them the week before. They told me to call back when he'd moved in which I did.

They then wrote to me and said they'd overpaid me by £800 cos I delayed telling them he'd moved in??!!!

I disputed it and disputed it despite being told I'd go to court etc, I wrote to the adjudicator and even got my local MP involved.

Anyway, the adjudicator was fantastic and got me all the information. For some reason they had that I had a son called Andrew who was 18 and at Uni (I was 27 at the time!! and my kids were 5 and 0).

Because of all the mess ups they had made the adjudicator made them write my overpayment off and even send me £50 compensation for stress and £25 for phone calls and letters!!

Result!!

As long as you were always honest with them and had no reason to think you were overpaid I would say don't give up, keep arguing it out!!

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