TAX CREDITS PROBLEM - PLEASE HELP!

[MAGDA]

Hi, we have received letters from HMRC, one stating we had an overpayment of £500+, the other stating amount still to be confirmed for an overpayment of £1300+ and amount already recovered £400. I have always religiously updated HMRC when any changes have occurred (that's something I have always been really on the ball with) such as my daughter moving on from A levels to Higher ed and any changes in our income. However, at the end of £2011 my husband had earned more than we had expected as he had done some overtime (unexpected) and received a surprise bonus, which increased his usual salary by around £4000. I contacted HMRC with this figure and they then asked if the overtime was guaranteed etc, to which I replied no, and for 2011/2012 we expected my husband to be paid his standard salary as we obviously could not foresee whether there would later be overtime or not. However, towards the end of 2011, my husband again had some overtime and when I realised his salary would again be a bit higher, I telephoned HMRC and updated them. I have looked through some old paperwork and it seems I had a letter from HMRC in jan 2012 stating that the amount still due from us was £1300 and amount already recovered was £442 and would be recovered from future awards. HMRC still continued to pay us £25 pm, stating this was still due. I hadn't noticed this at the time asthe last couple of years haven't been great, had major surgery and two court cases going on and I probably scanned the letter to make sure the updated salary was correct, and stuck it to one side. However, I thought there was a threshold in place, previously £25000 and now £10,000 to cover such things.

I know our options are to contact HMRC to offer monthly repayments (which we will really struggle to do) or to dispute this, based on the fact that I updated HMRC all along with any changes. Any advice on what to do would be greatly appreciated. We are no longer eligible for tax credits by the way, due to only having one dependant (although in reality we have two!) and the changes made to salary threshold by the current government, which obviously means a lot of people are now not eligible for tax credits at all. We are really going to struggle to pay this back as we really don't have any surplus income each month and already find things increasingly difficult, as, I know, do so many others.

Aplogies if this is a bit long, hope it isn't too confusing.

thanks, Magda

ps: As an aside, The two court cases I mentioned above were handled by your preferred solicitors, so many thanks to them. They certainly gave Cabot/Hfo a Run for their money.

[MAGDA]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

I just phoned HMRC again and was told that the £1300, yet to be confirmed, is in addition to the £571 figure for 2010/11. I explained that I have always provided regular updates and had given them the correct figure for my husband's salary, but due to overtime at the latter part of the year, the figure had been more than we anticipated. She confirmed that she could see I regularly telephoned with any change in earnings info etc and had told them my daughter was finishing her A levels and so on. I asked why the threshold of £10,000 (previously £25,000) didn't apply as I had thought if you earned more than expected in any tax year that this meant you weren't required to pay any overpayment back. She agreed that she thought that was the case, but wasn't certain why I was being asked to pay the overpayment back and suggested I dispute the sums being claimed. So guess that will be my best option for now and will have to see what happens.

[Deepie]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

http://www.hmrc.gov.uk/taxcredits/th...ents/index.htm

Iv'e just been having a look here ^^

[MAGDA]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Thanks In 2 deep - will have at look at that. Let you know what turns up. the person I spoke to at HMRC said they are really busy at the moment with overpayments and because the income threshold has been reduced now, people don't now have the opportunity to pay the overpayment back out of their next award, which makes it even worse.

regards,

Magda

[MrsD]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

MAGNA

Never ever presume that anything that comes to you on a bit of HMRC headed paper is correct. Check, look again, phone for advice and check again. They have no idea what they are doing and the government keep changing the rules so have no opportunity to learn. However, just because they are busy, doesn't mean they can't deal with your complaint, I made them go through 5 years worth of tax returns on the phone and guess who was right, yup that would be me.
so definitely check and don't agree to any payment plans until you are absolutely sure that
a) you actually owe them the money
b) they actually have the right to claim it from you
c) their figures are absolutely correct and you agree with them

All dealings with HMRC are a negotiation not a demand, they rely on you to give them the correct information, however, you rely on them to do the right thing with the information you supply, if they don't that isn't your fault, it's theirs and you should open a complaint.

keep us updated

[MAGDA]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Hi evenlessdopey, will definitely go through everything to the smallest detail and see what I can discover, going to dispute this anyway, which if nothing else, will delay having to repay it for a while anyway. I know they are pretty clueless from what I have heard, so will make sure they do have a right to any money. It is annoying when you have tried to do the right thing all along by giving HMRC regular updates and making sure they knew about any changes, and still we end up owing them money.

Will let you know how it goes,

many thanks, Magda

[SXGuy]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

It doesnt matter what you do to try and help hmrc get it right, doesnt mean they will. I would def query their figures, because that is one area they continue to get wrong.

From unlawful late payment penalty fines, to issuing people with incorrect tax statements showing their gross turnover as net profit and demanding tax on the whole lot.

It wouldnt suprise me if they got your tax credits wrong too.

If you have trouble working out what should be correct, theres a few people on here who may help. failing that you could speak to an accountant who deals with tax credits, and they will work on your behalf to sort the mess out with hmrc.

[MAGDA]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Hi SXGuy, think I will try to dig out all of the old paperwork tomorrow, should have it all somewhere, I normally keep all of the awards, filed away in a carrier bag somewhere - great system I've got. I know that there is supposed to be a kind of safety net with the £10,000 threshold, so that if you earn slightly more and are within that figure, as long as you have updated HMRC with any information as soon as you feasibly can, I don't think you should be penalised.

Many thanks, Magda

[di30]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Just wondered if this one is still ongoing or resolved?

I am questionning on an overpayment as I've always kept them up to date, and luckily kept all letters (copies) and received from them with new awards etc.

[MAGDA]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Hi di, I sent off my form disputing the overpayment back in June and rang them to check they have received it, whch they had. Haven't heard a thing, no further letters, or anything else. I did ring to see what was happening (although it takes forever to get through to anyone - should be a free phone number!) and was told that they have a lot of these disputes to get through so it could take a while!

Good look with your dispute - think you will be in for a long wait before you hear anything - mind you, as long as they leave me alone in the meantime, i'm not too bothered

I will let you know if I hear anything in the meantime, fingers crossed for us both.

Magda

[di30]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Wishing you luck with this.

With mine, I only just received my new award for the year, although provision after updating them of the yearly income, and they say there is overpayments of over £800, on checking it's more closer to £900, and it states they will not be deducting the amount yet, and just require further details..............
On checking yesterday, they ARE deducting!!! MUPPETS.

The provisional notice I received was dated 03 August and I received this on Monday 13 August!
It says new payments at £104 a week and until further notice/until they receive clarification, on checking my account yesterday they paid £90.

The award used to be £131 a week, because I claim the severe disability for my son as well.

I have kept them up to date on each change, and sending all copies of letters of the awards they have worked out for us.

Fingers crossed for you.

[MAGDA]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

I honestly don't think they know what they are doing. I asked why the disregard didn't apply in our case, because I had always given them my husband's correct salary and any extra was due to last minute overtime, which we couldn't have foreseen and we always rang and told them as soon as we knew our income would be a bit higher. There is supposed to be a disregard threshold of £10,000, which used to be £25,000, but they couldn't explain why this didn't apply in our case and we were told to send in the dispute form.

I hope you manage to get everything sorted, I know what it is like when you are expecting a cetain amount of money to be paid each month and it's suddenly reduced for no good reason.

Let me know how you get on,

Magda

[di30]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

I honestly don't think they know what they are doing. I asked why the disregard didn't apply in our case, because I had always given them my husband's correct salary and any extra was due to last minute overtime, which we couldn't have foreseen and we always rang and told them as soon as we knew our income would be a bit higher. There is supposed to be a disregard threshold of £10,000, which used to be £25,000, but they couldn't explain why this didn't apply in our case and we were told to send in the dispute form.

I hope you manage to get everything sorted, I know what it is like when you are expecting a cetain amount of money to be paid each month and it's suddenly reduced for no good reason.

Let me know how you get on,

Magda

Thank you, and the best of luck to you too, will keep a close eye on this thread.

You are so right though, they do not know what they are doing, and all these new changes do not help.
They never seem to get back with a clear explanation do they?

The letter I posted yesterday, it appears they have received it, just checked track and trace now.

I will of course keep you posted too, thank you x

[MAGDA]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Hi again, just an update. We received a letter yesterday which was a notice to pay £1300 odd in overpayments. I rang the tax credits helpline and informed them they should not be chasing any alleged overpayments at present as this was subject to dispute. The person I spoke to informed me that my dispute had now been 'resolved' and my husband and I are liable to pay back the amounts being claimed. We have until mid October. I said it was nice of them to let me know, and he said oh well, it was resolved at the beginning of Sept and a letter will be going out to you. I notice there wasn't any delay in issuing the notice to pay though.

I'm not sure what to do next now. The situation seems to be that in the tax year 2009/2010 my husband had a transitional period, from one employer to another, he was essentially self employed (a contractor) at the start of that tax year and he worked under an umbrella company so paid tax etc at source. However, midway through that year, the contract was awarded to a different company and this company gave all of the contractors now working for them little option other than to go permanent. As a result, my husband's final earnings were around £5,000 more than his taxable earnings for the previous tax years, due to the way his tax was now calculated. I rang HMRC and told them my husband's earnings for the previous tax year prior to the start of the new tax year, so I told them well in advance of the official renewal date.

I was then asked my husband's expected income for the current tax year also and I provided the figure (he would now be working a complete tax year with his new employer and I therefore gave his actual annual salary, as would anyone else). However, towards the very latter part of this tax year, 2010/2011, my husband had a spate of unforeseen overtime which meant that his actual earnings were around £1000 more than the previous tax year and around £5,000 more than his actual salary for that year.

I again rang HMRC and informed them well in advance of the renewal date the details relating to my husband's actual earnings and again was asked what his salary was due to be for the tax year 2011/2012, again I gave his actual salary that he expected to earn and the figure stated in his contract of employment details. However, some members of staff were made redundant for one reason or another and due to staff shortages and so on, my husband then had to work a fair bit of overtime again, mainly the latter part of the year, during December. As soon as the Xmas period was over, I rang HMRC and informed them that my husband's earning, due to this overtime, would be higher than anticipated, and I also told them about a change in my daughter's education, prior to the change actually happening. At the end of this tax year, the difference between my husband's actual earnings and the previous years earnings was around £1000, and again around £5,000 more than his official salary, as a result of the unforeseen overtime.

I believe the overpayments are being claimed for the tax years 2010/2011 and 2011/2012. I am not sure why the disregard doesn't apply and cannot get any clear of satisfactory answers from HMRC. The man I spoke to yesterday asked if I had any further information to support my dispute and if not, then basically just lump it and like it.

We are really worried sick now as we just don't have enough surplus income even to pay monthly amounts, not if it we have to clear the overpayment within 12 months. We already struggle each month as it is.

We are really upset, as I have always done my best to make sure I ketp HMRC up to date with any changes and I have certainly not tried to mislead or provide information that wasn't correct, and yest we find ourselves in this situation.

Any help greatly appreciated. Many thanks,

Magda

[SXGuy]

Re: TAX CREDITS PROBLEM - PLEASE HELP!

Hey MAGDA, please dont worry about this as much, it can easily be sorted ok?

You have a couple of options at your disposal.

Firstly, i you or your husband in employment? if so, you can ask HMRC to deduct the overpayments from his or your Tax Code.

This means that one of you will see a bit more being taken from your salary each month but if its spread over a year or two you might not find it too hard to manage.

Second option is to ask them to allow you to pay it off either in installments or lump sums. They may add interest doing it this way, but should be able to give you a figure for repayment. if you cant afford it, then you will have to negotiate an amount you can afford.

If it was me, id go for the first option.