HMRC Chasing me for benefits I wasn't paid!

[breakanegg]

Hi peeps,

 

Dunno if right place, had a look around the forums and this seemed the most appropriate place.

 

I'm having a really tough time and trying not to feel sorry for myself, I know I'm not the only one but my situation has been getting worse over the months and I've just had the icing on the cake.

 

I was paid off last May and have been unemployed since, getting chased from so many DCA's, letters, phone calls, emails, I can't keep up.

 

To top it I got a letter from HMRC saying I had undeclared rental income and had received housing benefits.

 

I was really confused since I have a mortgage I don't get benefits and I don't get rent. So I rang them and the women was really rude, I'm not joking this woman took pleasure in reducing me to tears, berating me and all but accusing me of ripping off the government.

 

Turns out back in 2002, a flat I owned was occupied by my brother. I was living elsewhere. My brother received housing benefits and he most of the time gave me money for rent. I was paying a mortgage on the place and was still paying the gas/electricity etc for my brother, basically subsidising him living there. He was having problems with drugs and being a big sis I was helping him out.

 

I vaguelly remember way back then at one point there was an issue with his housing benefits, they claimed they'd overpaid him. I think it was because he'd forgotten to hand in a sick line or something trivial like that. Next thing I know they're trying to chase ME for the over paid benefits. I told them point black to go to h3ll. Benefits weren't paid to me, I was the landlord. If they've overpaid someone benefits that's their problem and at very last they should chase him, not me.

 

Explained this to the evil woman at HMRC, now I've got a letter through as follows:

 

'I refer to our telephione conversation.

 

I note your comments but would ask you to reconsider the fact that you have been in receipt of rental income in the past.

 

Information has been suppplied by Council that Housing benefit was paid to you in the past. I order that I can review your comments I require sight of bank or building society accounts held in your name or in join names for the period April 2002 to April 2004.

 

If you wish me to contact your bank/building society please complete and sign mandate.

 

If I do not receive your response in 28 days I will have no option but to assess you on the information I hold'.

 

I'm utterly gobsmacked, and angry and upset to boot. How on EARTH can they assess me for benefits I was never paid? On what information is this woman acting? Surely she cannot have any official paperwork to back this up? The simple fact is I was NEVER PAID HOUSING BENEFITS, there was not claim, there was no meeting with the council, nothing, nada, they paid benefits to my brother so how on earth can this be happening?

 

Returning to the rental income, it was sporadic and didn't cover the mortgage and as I said I was subsidising my brother living there. I thought you didn't have to be assessed by HMRC unless and until you made an income on rental which I certainly did not.

 

Really don't need this right now guys. Seems like the universe is against me just now, my whole world' falling apart financially, I can't get a job and now I'm being chased by HMRC for benefits that were never paid to me 8 years ago!

 

I'm not entirely comfortable with giving this witch carte blanche to ask my bank for whatever information she wants, particularly if it's not relevant to this matter. Don't I have any rights here?

 

Any advice on what I should do would be much appreciated.

[MIKEY DABODEE]

I think you need to make an appointment with welfare rights or cab as soon as possible.

take everything there and let them have a look.

hopefully someone who knows about Housing Benefit will be along soon

 

what made them look at it all now?

[2ltr16valve]

I suspect that, in order to get housing benefit you need to show you have to pay rent.... or at least should do ! by form of a tenancy agreement.

 

I would think your brother told them that you were charging him rent, and they paid housing benefit under the belief that it would be paid to you... as the landlord.

 

so, HMRC "assume" and it would seem wrongly assume that it was paid to you ! So they want their chunk of the profit maybe ?

[boswell]

I suspect that, in order to get housing benefit you need to show you have to pay rent.... or at least should do ! by form of a tenancy agreement.

 

I would think your brother told them that you were charging him rent, and they paid housing benefit under the belief that it would be paid to you... as the landlord.

 

so, HMRC "assume" and it would seem wrongly assume that it was paid to you ! So they want their chunk of the profit maybe ?

 

I agree, when i recently filled out forms they were asking "do you pay rent" and next one was "who to".

Also on a recent Tax Return they asked do i receive any rent from properties here or abroad, what a joke.

I dare say some backoffice wannabe has been trawling through old files and is trying to prove himself. They really are "scraping the bottom of the Barrel" to get the country out of financial ruin.

But thats no excuse for the *Lady* being rude, maybe a personal call into your local Tax Office will do the trick.

[adamrao]

Hi peeps,

 

 

 

Turns out back in 2002, a flat I owned was occupied by my brother. I was living elsewhere. My brother received housing benefits and he most of the time gave me money for rent. I was paying a mortgage on the place and was still paying the gas/electricity etc for my brother, basically subsidising him living there. He was having problems with drugs and being a big sis I was helping him out.

 

I vaguelly remember way back then at one point there was an issue with his housing benefits, they claimed they'd overpaid him. I think it was because he'd forgotten to hand in a sick line or something trivial like that. Next thing I know they're trying to chase ME for the over paid benefits. I told them point black to go to h3ll. Benefits weren't paid to me, I was the landlord. If they've overpaid someone benefits that's their problem and at very last they should chase him, not me.

.

 

 

MIKEY is spot on.

 

Welfare Rights or CAB. You were not the claimant so you are not the one to be chased. You mentioned they have asked about joint bank acount details in 2002-04, why you had an account jointly with your brother????:-? Did you brother actually pay you rent regularly???????????

[breakanegg]

Thanks peeps,

 

To answer few questions.

 

Unsure why looking at it now. I asked them that and they gave no explanation.

 

I didn't have any joint bank accounts at that time, just an account in my name, they'e clearly on a fishing expedition here.

 

I'm unsure about going to welfare rights and CAB, the benefits weren't paid to me but my brother so I don't have any paperwork. It's not like I can go and say they're trying to get back housing benefit they paid to me but housing benefit they paid to my brother.

 

He probably has said that he was paying me rent as the landlord and I did get rent sporadically but the amount he got (gave me) did not cover my mortgage so I don't see how HMRC can chase me for a profit, doesn't there need to be an actual profit for them to do that?

 

So say my mortgage and the bills I pay on the flat for my brother comes to £500 month and he gives me £300 a month surely HMRC can't tax me on that £300?

 

Plus, why are benefits telling HMRC I was the recipient of the benefits. If you say that you pay rent to your landlord x and in the offchance you've been overpaid benefits because you didn't hand in a sick line or something. SURELY they couldn't go after your landlord for that? What's it got to do with them? The relationship in terms of whehter benefits are to be paid is between the claimant and the benefits office no?

 

The other thing is I don't have bank records going that far back and I'm no longer with that bank.

 

They say that if I don't give them that information in 28 days they'll act on the information they have. That seems bit unfair since I don't know what frigging information they've got. I'm being asked to prove a negative here which is so frustrating.

[Zara33]

He probably has said that he was paying me rent as the landlord and I did get rent sporadically but the amount he got (gave me) did not cover my mortgage so I don't see how HMRC can chase me for a profit, doesn't there need to be an actual profit for them to do that?

 

So say my mortgage and the bills I pay on the flat for my brother comes to £500 month and he gives me £300 a month surely HMRC can't tax me on that £300?

So in essence he wasn't paying you the full amount of rent that he was getting from HB, can I ask did you as a landlord not his sister chase up these arrears? Did you have a legal tenancy agreement in place?

[James 01]

They are not chasing you for Housing Benefit they are chasing you for undisclosed rental income. It appears something has linked the Housing Benefit claim to you being the landlord.

 

Can you clarify as you state your brother was paying you money most of the time but then you state it was sporadic?

 

Are you telling the officer you have not received rental income whereas what you are saying here you have received it? The letter itself states the Council have paid you. This information may not be 100% accurate but it is not unreasonable to consider you have received the income.

 

Note that with the mortgage you will only get the interest element so even if the rent was not covering the mortgage for tax purposes this is not taken into account.

 

I am not sure why you think your bank statements are not relevant. The point is they are because they will show the rental income / outgoings or if you were paid in cash there could be cash credits. Your problem may be if you insist you have not received any rent then can you pay the mortgage on this place and the place where you were living ? They will look at your means.

 

Going to CAB will probably not help you as it is not a benefit issue.

 

They are attempting to establish what rental income you have received. Your question about does there have to be an actual profit to chase you then the answer is no because this is what they are establishing.

 

I suspect the information held is in electronic form instead of someone telling someone. If you don't have the statements you will have to contact the bank.

 

You may have to consider if you were receiving tax credits the rental income may affect this and if you have sold the property there could be a Capital Gain.

[breakanegg]

So in essence he wasn't paying you the full amount of rent that he was getting from HB, can I ask did you as a landlord not his sister chase up these arrears? Did you have a legal tenancy agreement in place?

 

Lol, er, no! I can't help it, he's my wee brother (30, and 6ft 2inches). To be honest I'm probably part of the problem, bailing him out all the time. I'm still doing it only now he gets no benefits. Big sucker, that's me.

[breakanegg]

They are not chasing you for Housing Benefit they are chasing you for undisclosed rental income. It appears something has linked the Housing Benefit claim to you being the landlord.

 

Can you clarify as you state your brother was paying you money most of the time but then you state it was sporadic?

 

Are you telling the officer you have not received rental income whereas what you are saying here you have received it? The letter itself states the Council have paid you. This information may not be 100% accurate but it is not unreasonable to consider you have received the income.

 

Note that with the mortgage you will only get the interest element so even if the rent was not covering the mortgage for tax purposes this is not taken into account.

 

I am not sure why you think your bank statements are not relevant. The point is they are because they will show the rental income / outgoings or if you were paid in cash there could be cash credits. Your problem may be if you insist you have not received any rent then can you pay the mortgage on this place and the place where you were living ? They will look at your means.

 

Going to CAB will probably not help you as it is not a benefit issue.

 

They are attempting to establish what rental income you have received. Your question about does there have to be an actual profit to chase you then the answer is no because this is what they are establishing.

 

I suspect the information held is in electronic form instead of someone telling someone. If you don't have the statements you will have to contact the bank.

 

You may have to consider if you were receiving tax credits the rental income may affect this and if you have sold the property there could be a Capital Gain.

 

Actually there does have to be a profit. I spoke to the manager this afternoon and explained that my brother, who was a recovering drug addict was in receipt of housing benefit from the council. he sometimes paid me money £100 here, £200 there but most of the time his living there was subsidized by me.

 

My bank statements only prove that the benefits were not paid to me directly. I mean not being able to prove a negative in that my brother could have simply paid me the benefits in cash, which he didn't.

 

They know how much housing benefit was paid to my brother, I don't have that information.

 

I managed to find the bank accounts and discussed them over the phone with the manager.

 

He said my mortgage payment and expenses were greater than the benefits and there was no evidence of me receiving payments from either my brother or the council so there shouldn't be a problem.

 

My means wasn't an issue at the time for this property and for the property I was renting where I was working.

 

I said I'd scan and email the statements I found, he doesn't think there will be a problem so here's hoping. I'll post back how I get on.