Tax Credit Overpayment Demand

[Observer]

I hope that someone can help with a tax credit overpayment problem that has been worrying me for a long time. I am at my wit's end and don't know where to turn.

I am sorry to put the full story down, but I hope you will see the aggravation that I have been put through.

After 2 years of hearing nothing and having appealed against a decision, I have just received a Notice Warning of Legal Proceedings from HMRC on a Tax Credit Overpayment of £2,200 and it is scaring me badly.

In 2004, I was full time employed and was forced to go down to reduced hours (16 hours per week) due to a bad back. Prior to me going ill, I was claiming working tax credits and child tax credits quite happily. At the time, I contacted the Tax Credits hotline by phone to inform them of my reduced hours. They said that they would adjust the payments accordingly.

When I received the renewal form through at the start of the next tax year, I noticed that they still had me as working on a full time basis. I contacted the hotline again and told them that it was still wrong. I filled the renewal form in and returned it to them and heard nothing more, however, they still carried on paying me at the incorrect rate.

In 2005, I also temporarily split up from my husband and also rang them again to inform them of the change in my marital status. Subsequent to this, I received four letters in the same week all showing different amounts that I was allegedly entitled to receive as a new payment. I attempted to resolve the confusion again by phoning the same hotline and was this time informed to rip up all the letters as it was obviously a mistake and they would send out another letter with the corrected tax credit amount.

A letter duly arrived and I received a lump sum payment of approx £1,000. Just to make sure, I again rung them to confirm that this was the correct refund due and they stated it was all ok.

Later on in 2005, my husband moved back in and I again spoke to them to inform of this change. In October of 2005, I stopped working because I was about to become a partner in a restaurant with my husband. New forms were sent which we sent back to tell them that we were now self employed and they stopped paying the tax credits on the back of this. At the start of the 2006/07 tax year, we did not bother to fill in any renewal forms as we were still self employed.

In May 2006, an HMRC demand came through for nearly £5,000 claiming overpayment from the time that I was still allegedly working full time, even though I had told them on a number of different occasions that I was on reduced hours. I wrote back to them again to tell them that their details were wrong and contested the claim. They responded by ignoring my letter, stating that I hadn't informed them of the changes and I should have known how much that I was getting paid. For the umpteenth time, I phoned and wrote to them stating that as it was their mistake, I would not be paying.

They threatened enforcement proceedings but had not heard anything for over two years until the letter received today.

It has worried me so much that I have not dared to reclaim any working and child tax credits owed to me for the past two years thinking that this will also be used against me.

Can someone please explain what my options are and how I might be able to go about getting this closed once and for all. Do I ignore the letter or acknowledge it for example?

Thank you for taking the time to read my story and I hope to hear from you.

[poppynurse]

You need to dispute this overpayment - phone them up and tell them this (and also put it in writing) ask them to send you a full breakdown of how this o/pay occured and ask them to send you the appeal forms. If you can show it's their mistake they can write the o/pay off. But you must not just ignore it - they won't go away!

[dannymyers]

Originally Posted by poppynurse

You need to dispute this overpayment - phone them up and tell them this (and also put it in writing) ask them to send you a full breakdown of how this o/pay occured and ask them to send you the appeal forms. If you can show it's their mistake they can write the o/pay off. But you must not just ignore it - they won't go away!

I also agree to this you need to dispute.

[adamrao]

Sorry to hear about the situation.

You been doing a brilliant job as informing Tax Credit Office about the change in circs. every time.

You have been given a correct advice. The demand is quite high and you need to ask Tax Credit Office (TCO) for full beak down of all the overpayments.

If you think the advisor on telephone is not capable enough to explain the overpayment then feel free to ask him/her to put you through to Overpayment department. Not only that ask them to provide you the tapes or CDs of recorded calls you made in the past.

YES - you can either challenge the whole demand or just the recovery procedure.

You can download TC846 form from this link http://www.hmce.eu/forms/tc846.pdf but please dont forget to ask for full Overpayment breakdown from TCO.

If you have Welfare Rights Service in your area or Citizens Advice please contact them asap. TCO can not cause you any financial hardhip to recover the money as it against their own recovery guidelines

Good Luck

[fidji]

There are a lot of people in your situation. Go to Welcome to Tax Credit Casualties (TCC) for help.

[Observer]

Thanks for your help everyone and for the sound advice. I will get to work on disputing it and will let you know how I get on.

[adamrao]

Originally Posted by Observer

Thanks for your help everyone and for the sound advice. I will get to work on disputing it and will let you know how I get on.

Yea Observer keep us updated. Good Luck.

[emmaf01]

A letter to your MP might also help- just to get an extra cannon in your arsenal.

But local council welfare rights officer would be a help- I'm a broken record on how good they are!

Good luck.