There has been a sharp rise in debt problems caused by tax credit overpayments, Citizens Advice has said. The charity says that in the year to March there was a 14% increase in the numbers getting into financial difficulty, as a result of having to pay the money back. But HM Revenue and Customs (HMRC) has denied that people are being harassed to repay what they owe. The overpayments happen when people's income rises unexpectedly. They are then asked to pay back money they have received from Child or Working Tax Credits.

Adverse impact.

In some cases people have been asked to repay £7,000, after their circumstances changed. Maureen Grosvenor was asked to repay £2,600 in tax credits, after her husband left her. HMRC admitted it had made a mistake, and eventually cancelled the demand. But the experience was very stressful. "I was devastated. I was depressed," she told the BBC. b"I couldn't afford to pay them back. I thought they were going to have to send me to prison," she said.....Read more here