Dear Erika, Thank you for raising this up on this website. I am new here and read some threads with interest. Any further news on this subject from you? I received this letter last week, unpleasant. I find myself relying on working tax credit just about for 1 year after the divorce. Before my ex was managing our joint claim (which is now apparently is a huge tax overpayment but it is a different subject altogether!) I have a live-in aupair (lady) living with me, who helps looking after kids. I received this letter two weeks after finding a perfect lodger for us, which is tricky as we have small place. The lodger moved in for 2 month (hope he stays longer as helps with bills). There is a new legislation I believe which allows £4,250 per annum tax free, I did not made Tax office made aware about the lodger and now I feel that I am doing it because of the letter they have sent to me. If they assume if this young graduate is my partner this is just funny! But who knows, maybe they think, that either my au pair or this 24 y o with his first job from Greece in London is my partner! I somehow think his appearance was too close to trigger this. Generally speaking, do you have to report a lodger even, if they count £4,250pa outside the tax? If you have a moment to reply - this will be greatly appreciated. Kind regards, KW

Hi, Thank you for reading I appreciate your time, I am sorry it is a rather long one..... I never dealt with Working tax until after the divorce and once I found work, I put in a single working tax claim in nov/dec 2009. Background story. I am divorced, degree abs June 2009. Matrimonial house sold in July 2009 and I live on my own with two kids under 7 (and live in aupair). I put my working tax claim in November, was working fulltime, since Oct temping 25-30 hours. My ex husband mentioned that there is a tax overpayment he is disputing, saying they made a mistake and that they owes us monies. I didn’t pay much attention to it, as I never dealt with working tax element when we were together and divorce left me with 38,000GBR debt in loan and cards already, plus £2K to my brother (cards were supporting house bills when my ex was made redundant and decided to set up a business when our child was born). My ex claims a lot of debt too, although he never had credit cards. I was naïve with DYI divorce, he took a lion’s share of the proceeds from matrimonial house, some 60 K, I agreed to 20K, 5K to clear some immediate business hire debts, and 15K of each represented a 3-year children’s maintenance. On 14th October 2010 HM sent me a letter claiming half of overpayment, just under £12K from me. This is the first communication from the Tax office in this regard that I received from them, despite my address was registered with them for working tax since November 2009 under single claim. I barely managed to come to some arrangements with other credit cards, bank, loans, I have two CCj in 2008 whilst going through the divorce; learning now that I owe £6,000 to Tax overpayment is shocked me to bits, as I don’t earn enough, occasionally I rent out the room for 1-3 month, which is tricky as I rent a 2 bed flat. One of the houses that is impossible to sale but rents out ok, substitutes towards my rent. When I enquired HM about an overpayment, claims are going backas: £899 for childcare overpayment in 2005 £2,250 childcare overpayment in 2006, than some 4,700 for 2008 & 3,700 for 2009 as they claim no tax return was produced for both they made us liabale for both amounts….. I had no idea, but in their eyes I am liable…. Between myself and ex we have 3 mortgages jointly still, all for the same reason – there is not enough equity to sale and cover the mortgage as all heavily over-mortgaged towards set up and running of the business. There is an ‘A’ project, consisting of a shop and flat above, which fall down in value by 60-80K, we agreed my ex manages it whilst it rented; it is 9 month arrears so impossible to take my name off the mortgage. The ‘B’ project – is the above-mentioned 4bed house in Brixton, was heavily in arrears, nearly been repossessed in 2008/09, now have a good tenants. ‘B’ project is heavily mortgaged too ( £400K and will sale probably £450-460K). The re-mortgaging was mainly towards the set up of family business which ex liquidated in 2008. Looking back maybe my ex had tacked away cash, as he was in charge of finances and never agreed to have a 3rd party to advice us; now he is constantly overemphasises that he cant pay rent, cant pay council tax….had bailiffs…who knows…All I know I am liable for the joint Tax Overpayment now, which was made by him, but I stupidly always signed. It went to joint account and in 2007-08 I barely saw any monies in the account, hence I was unable to pay minimum on GE cards and got CCJ… ‘B’ rental project is important to me, as it provides towards the rent for the 2 bed flat that I live in and that is near kids current school ins surrey. I do tax return for project B, (and my ex suppose to account for project A as he receives rent from the flat which contributes towards the shop’s mortgage. I am worried that HM will not find my offer attractive enough and will decide to go after the house I rent out. House B looks on the paper as out of 3 properties that we still unfortunately owe it is the only house with some equity, albeit only £50 K gross. As it was a second home for so long, accountant confirmed that Capital Gains Tax will be in the region of £70K-80K, as property increased by over £200,000 since it was purchased in 2001 and always was rented out. I am worried that HM will not see that. I am worried that they would just take it away, which will leave me in more debt because of the CGT, and than I will have to rely directly on benefits for housing.. I was thinking that I am just about pulling myself together, trying to get an aupair of 2 years registered with Ofstead…etc. now I am worried if HM see that if I am not capable to pay anything or my offer is too little, would they go after the rental house B which helps me enormously with renting a small place new kids school… My local CAB office don’t understand in working TAX matters, they suggest me putting forward I& E and to move in into the house with kids. There is no transport connection between current school and Brixton house, aupair does not drive, I would have to look for a new school. On the other hand, my ex been advised by CAB in his area, and that person happens to work fro the HM and wrote a challenging letter to the HM tax. Although ex advised that this CAB was disputing claim for both of us, the copy of the letter I received, only makes reference to my ex…their letter of 5 November was disregarded by the HM Tax office. HM tax saying they hear nothing new, that this claim was disputed twice now and that I have to pay. I sent my dispute form last week. But I don’t have any facts. When I chased up my ex – he is now awaiting his second meeting with CAB on 18th FEB. Shall I still supply I & E to HM revenue as suggested by my CAB today or wait for the outcome of the ex’s meeting? Would you happens to know if HM Revenue is likely to take away rental property whilst you renting yourself, as this will leave me in a more debt because of CGT implication. Should I just bite the bullet and move in the property – I have to give two month notice at mine and to the tenants there. What actions I should take. I will appreciate your advice, comments. Kind regards, KW