Tax Credits Overpayment - Repayments didn't stop!

[cinders29]

Hello all,
This post is not really a question, more information for anyone who is repaying back any sort of Tax Credits.

Having been awarded working tax credits back in 2004 I was pleased to have the little extra income to top up my wages.
All along I was on the minimum wage, but the government slowly pushed the min wage up and it wasnt until the end of the year that I realised in 2006 (like many others) that I had gone over the threshold for Tax Credits.
Considering i was still working the same hours in the same job, I found it stupid that they did not realise the increase could possibly affect these type of claims.
I was lucky enough not to have been over paid too much, (£150) and they did not hesitate to ask for it all back, along with a stern warning of prison if I failed to repay! I opted to pay it back over 12 months.

They sent me the relevant form and a month later and each month after £12.XX was debited from my account.
That was October 2006.
Having checked my account this month I noted another repayment on 5th November.
I decided to give them a call asking if I owed anything, I was basically told to work it out for myself and that the system was showing nothing was owed from October 2007.

I asked so why was another payment taken in November, the operator then worked it out for me and said I had paid back £160.XX And that I needed to cancel my Direct Debit and ask my bank for an Indemnity Refund of the last payment, as for them to do it it would take too long....

Luckily enough I was able to get the indenity refund of the last DD. (not sure if it can be done for previous months DD's)
But it just goes to show that these daylight thieves would not have stopped debiting my account had I not have cancelled it or informed them.

So I hope this post helps anyone who is currently paying back an overpayment in Tax Credits to the Inland Revenue, PLEASE CHECK your repayment dates so they don't take more than they asked for and cancel the DD once its paid back as they will continue to take your money!

They are quick enough to take money from you but won't go out their way to give you it back!

[sismile]

Tax credits are my pet hate.

I set up my business in 2000, to start with we got the old WFTC which was worked out on what you earnt in the previous few months and was updated every 6 months. Then the current system came in and instead of asking what I had earnt in the previous few months or year they asked what I had earnt nearly 2 years previously (which was my first year in business when I made a loss).

So I was overpaid a massive amount in the first year. Never mind I thought, it will get sorted in the second year after I told them how much I had earnt. But no, they overpaid again and took back about £50 to repay the previous year.

Here I am now with overpayments of £7000. To date they have not asked for any of this back and have only reduced our tax credits by very small amounts to repay the debt.

Problem is over the last couple of years the profit from my business has come close to the threshold for WFTC. At some point it will go over the threshold and I'll get 12 months to repay £7000, something I can't do.

I have offered to start paying off some of the overpayment but the tax credits system does not allow for this. They just said I have 12 years until my youngest child will be over age you can claim. I'm only getting something like £50 a year now, but they can't even take all of this as a repayment.

For self employed people the system is very flawed as your income can go up considerably (as well as down) each year and you don't know exactly what profit you made until your accounts are prepared.

I have heard they get very nasty once you are no longer claiming tax credits and you either pay up within 12 months or go to Prison. Yet every time I have called to try and sort out the overpayments they tell me not to worry.