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tax credits overpayment. .

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Ok received a letter this morning, can anyone please advise if I need to take any action if any and what action HMRC will take.

 

Period ending April 09 was awarded 10604.00. each year we review a number of tax credits etc. you told us your joint income was 2008-2009 13098 but we hold information that shows income of 19584. if you disagree with this information contact us before 18th dec 2009 or we will ammend your award based on the information we hold. .

 

The truth is my wage would of been about 19000 so this being correct were do I go from here, I now only have a part time job earning 8000 per year and have 5 kids so we kinda live on tax credits so if it were to stop what can I claim etc ? . . . at a real loss with this. any help appreciated.


I am a consumer helping other consumers. Together we can and will make a differance. Please double check any information or advise I may give as I like yourself am learning as I go along in life.

1) give a small donation to this site to keep it going because without this forum I would know nothing.

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Have you made them aware of your current situation?? Has your award been amended based on your income of £8000 per annum? If you haven't then get this done straight away.

 

With regards to the old award inform them of your exact income (this can be found on your P60) - either ring them or write to them (send them recorded delivery) advising them of this.

 

With your income being so low have you checked that you are recieving all of the other benefits you are entitled to? Such as housing / council tax benefit? With an income of £8k i am sure you would be eligible and you can do a calculation on the internet for this.

 

With regards to the overpayment - generally they do like to take it out of this years money BUT if you explain it will cause undue hardship then they may budge and either take less or take it in a different way.

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I think I am correct in saying tax credits are based on you previous years income not your present income.

So if you did as you say earn £19000 thay will base your award on this for the next tax credit year and you will lose money.

What they do if you now earn less I am not sure but when I was claiming them I found that actually they are one of the best govt. depatments to deal with very polite and very quick to reply. Best thing to do is talk with them and see what happens. It may be that your child tax credits will rise to make up the fall in working tax credit!!

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I think I am correct in saying tax credits are based on you previous years income not your present income.

So if you did as you say earn £19000 thay will base your award on this for the next tax credit year and you will lose money.

 

Not quite.......they base your current year on your last years BUT if your circumstances change then you have to tell them and they amend your award (and payments) to suit. In this case the payments would increase when the OP told them about the decrease in income (although not by much as payments are based on the income of £10k not the actual £19k). What they would attempt to do would be correct this years award based on £8k and then deduct money for the overpayment each month/week.

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They are aware that my income is now 8k and I infomed them of this back in april when the change took place. so they have been paying me this year for the 8k income. However the previous year they paid me for a 13k income when it was actually 19k, an honest oversight that has now comew to light. so can they stop my credits in order to collect back.

I have applied for council tax benifit but refused as my tax/working credits and wage add up to about 400 a week. also my house is a mortgage and needs to be paid. to be honest, in the current climate i feel i would be better off on the dole with 5 children......... although this is not my prefered choice as somone who has worked from being 15 to the age now of 35 but everytime i work money out my income would be greater if i was to leave my employment. Now with this tax credits im not sure what to do. it is a struggle but i guess in the current climate we are all in a bad position.


I am a consumer helping other consumers. Together we can and will make a differance. Please double check any information or advise I may give as I like yourself am learning as I go along in life.

1) give a small donation to this site to keep it going because without this forum I would know nothing.

2) Use your experience to help somone else on another thread.

 

Please do not PM me, my mail address is my username at this site address . I will not under any circumstances give out advise or help through mail, only on the open forum, however feel free to mail me to point me towards your thread and general talk etc.

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They are aware that my income is now 8k and I infomed them of this back in april when the change took place. so they have been paying me this year for the 8k income. However the previous year they paid me for a 13k income when it was actually 19k, an honest oversight that has now comew to light. so can they stop my credits in order to collect back.

I have applied for council tax benifit but refused as my tax/working credits and wage add up to about 400 a week. also my house is a mortgage and needs to be paid. to be honest, in the current climate i feel i would be better off on the dole with 5 children......... although this is not my prefered choice as somone who has worked from being 15 to the age now of 35 but everytime i work money out my income would be greater if i was to leave my employment. Now with this tax credits im not sure what to do. it is a struggle but i guess in the current climate we are all in a bad position.

 

I would write to them (send it recorded delivery) before the 18/12/09 and give them your true earnings for 2008/2009 period. They will soon write to you and inform you what action they will take.

 

I know what you mean though about getting more if you don't work! I feel exactly the same....you're given with one hand and taken from with the other with our government! So much for giving people an incentive to work! :mad:

 

If you explain your situation i am sure you will be able to come to an amicable agreement with HMRC :)

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That is great Looby, thanks for the vote of confidence. I will let you know how it goes. tyty.......... does anyone know how to work out roughly I qwill owe back based on the figures in my first post ?


I am a consumer helping other consumers. Together we can and will make a differance. Please double check any information or advise I may give as I like yourself am learning as I go along in life.

1) give a small donation to this site to keep it going because without this forum I would know nothing.

2) Use your experience to help somone else on another thread.

 

Please do not PM me, my mail address is my username at this site address . I will not under any circumstances give out advise or help through mail, only on the open forum, however feel free to mail me to point me towards your thread and general talk etc.

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That is great Looby, thanks for the vote of confidence. I will let you know how it goes. tyty.......... does anyone know how to work out roughly I qwill owe back based on the figures in my first post ?

 

Why not go on the entitled to website and do one for both figures then work out the difference? Won't be exact but will give you an idea :)

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HI

 

I too have received a letter detailing almost the same

 

I tell TC everything that happens even the tiniest of changes as it is to my benefit doing so, the only overpayments I have ever had is what the TC office hve done and when a change has been paid and they messed it up but minor so I have gone with it to save hassle,

 

Anyway today I received a letter like yourself but my diffrence in income is 5363 they have it as more, I gave them less, the only benefit to me is that I told them that my partners was based on estimate and not exact because he to date still has not received any form of p60's pr his P45 from his previous employers, I also told them that I got his weekly amount that he bought home and x's it by 52 to give me my figure, when telling them this, they are happy to take this, this has been explained to the very helpful guy I spoke to earlier,

 

I have been told that the period was for 08-09, this has no effect on your current award! It simply results in an overpayment which they try to recover within the 09-10 year, so basically they will try and take the overpaymetn out weekly over the 17 weeks that are left! My parnters income too has dropped dramatically and again, the advisor told me that this will reflec tin ur current reward, however they will take this figure into next years award so tell them immediately should it go up, which I awlays do

 

My concern was also that they would take the higher income in accoutn for my current reward but they dont because when you change ur award it gets assessed on your current income, my partners income has been dropping loads recently and I have been ringing them monthly to inform them of any change!

 

Therefore I know my payments will drop, like you I have 5 children, I do rely on my TC, however I have been assured as I was getting VERY stressed by it all, that my weekly pay back amounts will be no-where near £50, this has reassured me a little however I am still concerned as to what my payments will be and whether something changes them drammatically

 

I still being told that my current award stays as it is, other than the amount that they take off each week for the previous years overpayment, because my situation has not changed for it to be reduced!

 

Again any advice from anyone that knows would be great

 

Currently my income was 5k less to what TC have been given, all I want to know is how much of a Overpayment this produces!?

 

Also it could also mean that my partner was not getting enough WTC because he was working 51 hours a week!!

 

Who knows!!

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I have just found this on the HMRC Website, which confirms what I have been told

 

The annual declaration asks for details of income for the tax year just passed. For example, for an award made in 2007/08, you must give income details for the tax year 2007/08 in the annual review that takes place in the summer of 2008.

The Tax Credit Office, in the initial decision at the beginning of the year, usually bases the award on income in the previous tax year (the exception to this is where you are on income support or income-based jobseekers allowance, when your income is treated as nil). For example, for an award made in 2008/09, the initial award is based on income in 2007/08. Following the annual review, the final award may either continue to be based on income in the previous tax year or switch to income in the year of the award. The rules say that you use the previous year’s income as the basis for a tax credit award unless:

 

  • income in the year of the award is lower, in which case it switches to income in the year of the award, or

  • income in the year of the award exceeds the previous year’s income by more than £25,000, in which case income in the year of the award minus £25,000 is used

 

 

This means that I am expecting a overpayment of roughly arond £3.7k and I am unsure as to how they expect to take all of that back within 17weeks!! without us suffering servere financial hardship!

 

My award of this year will stay the same as advised, but weekly amounts reduced to compensate the overpayment!!

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From what I understand they cannot collect the full amount over 17 weeks as the most they can take is 25% of your reward to pay overpayment.

If you find what you are payin back is going to put you in severe hardship you can phone them and explain, I have the phone number upstairs for the specific department so let me know if you need it. but no point in phoning till you know how much they want to collect and if it does put you in severe hardship.

It all has to be paid back so if afordable better to let them take it this tax year then next year you will get your true dues.


I am a consumer helping other consumers. Together we can and will make a differance. Please double check any information or advise I may give as I like yourself am learning as I go along in life.

1) give a small donation to this site to keep it going because without this forum I would know nothing.

2) Use your experience to help somone else on another thread.

 

Please do not PM me, my mail address is my username at this site address . I will not under any circumstances give out advise or help through mail, only on the open forum, however feel free to mail me to point me towards your thread and general talk etc.

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just on this if your not with the same partner and this over payment has happened (my case)..what will they do?

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