I have been commiting tax credit fraud and need help

[jjscotland]

The moment has finally come when I have been investigated by the tax credit office for overpayments.

Firtly let me say that I know I have done wrong but it is really easy to get yourself in a terrible situation by not having the courage to sort this out before it gets out of hand. I make no excuse other than I hoped that I could make it go away itself.

I started claiming tax credits with my partner for my two children from a previous relationship and our new son. We had just moved into our first house (with mortgage) and we recieved tax credits all above board in 2003. The first two years were fine and our circumstances remained the same however by the third year my partner was promoted and therefore recieved a wage rise, also at this time he was ordered to pay £450 per month to the CSA for his first daughter, as his wage rise would in no way cover this amount if we were to have a significant drop in tax credits at this time we would not have been able to manage.I know this sound ridiculous to some people but I panicked as I did not know how we would afford school uniforms and suchlike.

My intentions were to recieve tax credits to see us by in the short term and then confess and hopefully pay it all back when we were on our feet. Unfortunatley we never seemed to get there and so I hvae been claiming ever since. Every year I have redone my claim over the phone and I have always raised his wage ammount so as to lessen the amount of tax credit paid I have always wanted to confess and try and sort this out but my partner tells me to keep raising his wage until we no longer qualify and hopefully no one would find out. This sounds terrible and I am very ashamed that I have let things get this far, I also realise the depth of what I have done and the amount involved (roughly £15.000 ) I also know that my partner earns so much now that they will look at us as if we are extremely greedy people, which in anyones eyes we are. My partner has also accumulated so much credit card and loan debts that i relied on the tax credit money to buy clothing and stuff for my children

Anyway the letter I recieved this morning says that I am being asked about our joint income for the year to April 2010, I am assuming that when we let them know our correct income (which they have listed on the letter along with the fake income i gave them) and admit to giving false information that they will then check all our years of claiming?? Does anyone know the answer to this ? What will happen to me ? What should I do now?

[rebel11]

Hi jj

 

Welcome to CAG

 

The guys will advise as soon as they are available, they won't judge, just advise. Best to stay clam and put your best foot forward.

[leemack]

You need to come clean. Lying further will only make it worse if it goes to prosecution. They probably have information in order to make them start investigating.

 

I haven't many dealings with tax credit fraud so I don't know what their procedures are or how often they prosecute. I have seen some very large overpayments due to not declaring changes in circumstances which haven't been prosecuted. Someone with more knowledge on tax credits than me should come along soon.

[jdes26]

hey no one will judge you................... i understand exactly what the csa are like so please dont panic

ill hit red triangle and expert will come and help when they get message

[ErikaPNP]

Hello there.

 

As they have listed both the true income and the false income, they are obviously aware that the figures aren't adding up. This has likely happened due to a data matching excercise. In view of what they have found, they may well have already looked, or be in the process of obtaining further information in order to look at past tax years; they will do this by matching details held for NI and PAYE purposes held by HMRC against the information you have provided to tax credits.

 

Tax credits (administered by HMRC) operate very differently to DWP and local authorities in many aspects, and overpayments as a result of fraud are no exception, with HMRC favouring civil investigation as opposed to criminal investigation whereve possible. I'll explain the two below:

 

With a civil investigation for fraud, the aim is to reclaim any overpayments along with interest and a financial penalty. They will give the applicant an opportunity to co-operate with them cia a full disclosure (where they ask you for information and you tell them all of the facts). Where a person has been co-operative, HMRC can consider reducing the penalty depending on how much co-operation has been forthcoming. The amount of the penalty can be reduced by up to 50% for co-operating.

 

In a criminal investigation (which they can do for false declarations and deliberate misrepresentation), they don't play so nice, I'm afraid. A civil investigation can convert to a criminal investigation where a person refuses to co-operate or, where they co-operate a little but don't give the full facts and HMRC are aware that full disclosure has not been provided. Criminal investigation cases for tax credit claims involving false declarations about income almost always result in prosecution and these are usually successful given the information HMRC has access to in relation to a persons earnings from their tax records; it isn't a difficult one for them to prove. Add into the mix that HMRC has powers for criminal investigation that other government departments don't have, such as they have currently approximately 6,100 officers with powers of arrest split across three HMRC departments (Criminal Investgations 1500, Detection 4,500 and Internal Governance 50). A successful criminal prosecution can result in a variety of penalties ranging from a fine, community service order, criminal caution or prison, in addition to recovering the overpayment and charging a full financial penalty.

 

Given that they have written to you asking you to give them information, I'd guess that at the moment that they are investigating it on a civil footing and offering you an opportunity to give a full disclosure. In view of that, the best thing you can do for yourself is to admit all the false declarations you have made and give them all of the facts.

[jjscotland]

Hi.thanks for your reply. I have spent the whole evening in tears as I am terrified that I will go to prison, lose my children and home. I know and want to tell the truth but I dont know where to start.

I know that whatever happens is my own fault but as I have already said i didnt know how to stop once i had started. I have spent all day looking to see what will happen to me and i know whoever deals with my case will not treat it lightly as our joint income is so high they will see no excuse for my actions. I am so scared of what will happen to me and my family, best case senario is that they fine us and make us pay back what we have been paid but i dont think that will happen due to my partners income. I cant believe my stupidity and fear has led to this. I am trying to find a solicitor who has dealt with this kind of thing as i know we are going to need one. I am so frightened I will go to prison and my partner will lose his job but mostly I am worried about my children as one way or another i have ruined their lives. I am so ashamed and want so badly to fix this.

[ErikaPNP]

As I said earlier, it's likely that at the moment it is a civil investigation. They don't tend to write out asking for information when it's a criminal one. With an HMRC criminal investigation, they'll gather all the evidence and then go for an interview under caution, search warrant or arrest. They don't muck about like DWP/LA's.

 

Yours won't be the first nor the last case where they have seen a high income with a fraudulent claim. Once you give the first fals declaration, it can be very difficult for you to stop it. They see this all of the time. But regardless they always favour a civil investigation which (unless you don't comply/don't give full disclosure) is unlikely to get as far as a court room. All they'll be after is their money back with interest and the financial penalty.

 

They have written to you to give you an opportunity to give them a full disclosure on this. If it were me in that position, I'd take that opportunity rather than risk prosecution and the additional penalties that can go with that (and the fact that a criminal prosecution can be publicised in the press).

 

We can't tell you what to do, because ultimately that is your decision. All we can do is give you advise. In view of my experience in Welfare, a full disclosure would be the best way to go with this - damage limitation.

[jjscotland]

Thankyou so much for your reply. I am making myself ill as i cant eat or sleep for worrying

My partner and my aim is to sell everything we have and borrow wherever possible to offer a large portion of what we have claimed as a lump sum and if possible the full amount. we are going to be completley compliant with whoever deals with us as we know this is the best thing to to and I realise the gravity of our situation.

I have read online the punishments for what I have done and I am still convinced I will go to prison and i know I would deserve it as i have commited an offence. The ammount stated in my first post is actually more than £20000 so I am worse than I thought. I am hoping that our compliance will help as the thought of leaving my children is too difficult to bear. I dont care what happens to me as it was me who got myself in this situation and i deserve whatever i get. They have done nothing wrong. I know saying sorry could never be enough but i have never felt so sorry in my life. I am not sorry that it has come to this however a s i always knew it was comming and i feel releived that it is finally out in the open. i am not a bad person (although many will dissagree) I am a stupid person who has been too fearful of trying to sort this out as i have always believed i would go to jail and lose my children. I have never been away from them .

Any more advise would be welcomed as I really feel like im on my own.Sorry for my rambling but as i said before i have not slept and cannot eat for fear of what is going to happen to me.

Anyone else out there reading this and in any situation like this please own up before you end up like me ,I am not a strong person and I am paying the price for this, try and get strength from somewhere to help yourself.

[grrrrrr]

The first thing I would do, if I were you, would be to take stock, and try to work out exactly how much you have under-declared the income for each year.

 

You will need to try and dig out your award letters and your partner's P60 details for this.

 

You may find that it is not as bad as you first think.

 

Now, when you have the income information, check that you have been awarded all you should have been awarded - things like deductions for pension contributions, and student loan payments, eligible childcare, expenses not refunded for voluntary work or any work related costs that aren't refunded by your partner's employer. Personally, I don't know if maintenance payments are deducted, so you should check. Even if they are not deducted, if you can show the maintenance payments caused you hardship, then you should be able to show this.

 

Now, in your first post you said you think the overpayment is around £15,000 in total. Are you absolutely sure about this? From what you say you could be waaaay out on this.

 

If your claim was OK in 2003-4, 2004-5 & 2005-6, then we are talking about 06-07, 07-08, 08-09 and 09-10 for undeclared income. i.e. 4 years. For £15000 average overpayment per year, assuming the faster withdrawal rate, you may have needed to have undeclared income of over £38,000 for the 4 years, or over £9,500 per year! If that was the case then the net pay increase would have more than covered the maintenance payments. Now, I can't give detail for your particular situation, as lots and lots of details are needed and the rates and so on have changed massively over that time period, but from the bare bones of what you have said, (that you couldn't afford the maintenance and income levels were such to make you worried about buying essentials) you may have the wrong end of the stick on the overpayment amount.

 

So, answer the letter honestly and give them the full amount for the tax year asked, and then call them up and say you are confused and think you may have made some mistakes in the past and you would like to check.

 

If I've misread and you think you have underdeclared £15k over 4 years, then you may not have had such a large overpayment as you think. - you are allowed an in-year increase without it impacting your current year payments up to a limit (and that limit changed a lot over the period you are talking about), so it may only be 3 financial years, and if at the faster withdrawal rate, then the overpayment could be less than £6k, which they may only take back through reducing future awards.

 

Whatever you do, I would really strongly advise against trying to get a loan to cover it. It will be more expensive in the long run, as it sounds like you have debt problems anyway. Less credit is what you need, not more!

 

So, get your figures clear, and talk to CAB or use online historic Tax Credit figures to work out what you should have got against what you actually got. You may be very pleasantly surprised.

Tell HMRC what the last year's income was and talk to them about any errors so you can be clear about the relevant period.

 

Finally, and above all, don't panic, it won't help but may make it much harder to concentrate on getting the figures straight.

 

If it ends up that you do have a large overpayment along with other debts, I would recommend you go to CAB to see a debt advisor, and try to get your finances in order so you can manage while you pay it all off.

 

I hope it all works out for you.

[jjscotland]

Thankyou so much for your reply, I honestly feel that after spending last night going over our tax credit history that we will possibly have been paid more than £15000 more like more than £20000. I may have made some mistakes with that as my mind is afoggy mess right now (I suffer from bad anxiety and am currently on medication), I also have not eaten a thing for days and cannot sleep. Everything is such a mess and I dont know how I am going to cope, I know I deserve no sympathy and I put myself in this position but I know there is punishment waiting for me and all I can see is prison which is what I deserve. I just feel so bad that i have let everyone down. My partner is telling me to be strong but I am just living in constant fear and have no strengh.

I am hopefully going to speak to someone today to help guide me trough this, I then will call the tax credit people and tell them everything, this weight has been on my shoullders for so long I am glad it is comming to an end but it still doesnt take away all my worst fears.

Do you think I will go to prison or do you think they just want all their money back?

I would do anything to fix this.

[grrrrrr]

A legal advisor is best placed to tell you what any possible punishment would be in your particular case, and you should not seek to get specific legal advice on a web forum.

 

I do know, however, in general terms, that HMRC are less likely to pursue criminal charges than DWP / local authorities, and Tax Credit criminal cases are less likely to attract custodial sentences, but the exact punishment will depend on whether they choose to pursue criminal charges and your personal circumstances.

 

I would stress again, that if you think you have been overpaid £20,000 you need to have not declared a total of over £50,000 in income (the faster withdrawal rate is currently 39% and will go up to 41% next year - this has changed over the years which is why it is important to have an expert look over all the figures). This is a massive amount of money to have not declared, and does not really make sense against you saying that you would not have been able to afford school uniforms if you declared the changes while paying £450 a month in maintenance.

 

If the figures are right, that you didn't declare around £50k in additional income then you should talk to HMRC as soon as possible and make sure you have all the relevant documents and figures to hand.

 

Whether you pay the money back in one go or in instalments will make no difference to any penalty and should not influence any decision to instigate criminal proceedings, so I would not recommend getting yourself in any more commercial debt for this, as if you felt that an additional income of £50,000 still made you struggle to afford basics your existing debt must be astronomical and talking to a debt advisor asap is essential.

 

You should be very clear on this: paying it back in a lump sum should not make any difference as to whether you face criminal charges or not.

 

 

Your very best hope of sorting the mess out is to get the figures right and get professional advice, you are not going to be able to do that while you are panicking and in a state where you can't think clearly.

 

There is no point in worrying about what may happen at some other point further down the line, as you may never even face criminal charges. If you take control of the situation now and be as co-operative as you can be with HMRC, you have a much better chance of being able to sort it out. As Erika said, the fact that you have received a letter suggests it is currently being viewed as a civil case, and not criminal, which is in your favour. You cannot be sent to prison over a civil matter, but you should also be aware that if in the course of a civil investigation HMRC become alerted to possible criminal behaviour this may escalate to a criminal investigation, so you should get professional advice to help you. While you want to get the matter resolved as quickly as possible, the last thing you want is to call HMRC and incriminate yourself by accident! A professional advisor would be able to help you steer the course between being open and co-operative and not admitting a criminal offence, people on a forum cannot do that for you.

 

Try to stay calm so you can get it sorted quickly, get the figures sorted and get advice.

 

Good luck.

[honeybee13]

Fwiw, I agree with all the advice given on your thread. You can do this. You need to stay calm and go and see someone who can talk you through the figures and what to do. You'll be OK, the world is not going to end, and I don't think you're going to prison.

 

I've had mental problems myself and believe me, going round in mental circles is the worst thing you can do. Take it one step at a time and you'll sort this.

 

HB x

[jjscotland]

I have been to see my fathers friend who worked in the tax office and i have given him all the information i have along with my asurance that i will cooperate fully in any investigation. He is aware of all the details and is writing on my behalf to let them know of my situation. His aim is to guide me through the procedures and anything i dont understand. He has been honest with me and has told me that i will obviously taken to task but has told me he is hopeful it will not result in imprisonment. (I still think this will be the outcome).

I am glad i have started trying to deal with this although i am still full of fear for the future. Whatever happens to me is all my own fault . All that matters to me is keeping my family together. I have to start believing that that might just be achievable or i will fall apart.

Many many thanks for replying to me and anything else you can think of to help me would be greatfully recieved

[jdes26]

i wish all the best

and i hope things work out for you

 

jdes

[jjscotland]

Thankyoou so much for your kind words, I do feel, like the world is ending and am constantly convincing myself of all the worst things that could happen, no one could be harder on me than i am on myself right now. I have an appointment with my doctor tommorrow as i cant eat or sleep for worrying and i know my behaviour is affecting my children and i feel like ive had enough. I need to get my head together I know but its so hard to switch of the worrying. I do not expect anyone to have sympathy for me and my actions, i am the maker of my own troubles but being faced with this now after so long is so much to take in and i only hope i can gather strength from somewhere to see me and my family through this.

[jdes26]

you have the poppurtunity to put things right

sieze that oppurtunity and put wrong to right

what u did was wrong but we all do wrong sometimes

 

You have a long way to go but i believe you will be ok........ Theres alot of people in this world who take and never give back

and they walk around thinking there perfect

 

take care

 

jdes26

[Dafty21]

Hope you get out of this mess.

[Joanne1975]

Hi JJ

I am also in a mess with tax credits and im so scared i dont know what to do please help me, have you had any more info? did you go to the CAB?

[jjscotland]

just wanted to update as a lot of people on other posts say how annoying it is not to hear of an outcome.

Firstly let me say that i am not writing this from a prison cell. We have paid back overpayment for the years we have been asked about ( £4000) . We have recieved letter saying we are no longer entitled to CTC and our claim has been ended.

We dont know if other years will be looked into, if they are we will have to deal with the outcome then.

I will say we answered every question asked of us.

to others in this position I would say try to keep a sane head about you, I know this is difficult but I have learned that all the worrying in the world will not change anything. Medication may help in the short term( it did for me) but taking pills will not in itself solve this problem.

Take each day as it comes , dont worry about what other people might think just concentrate on your family and be strong for each other.

[ProblemsProblems]

Hey JJ

I hope you dont mind asking these questions.

Can i ask how long it took to sort it all out? Did you have to be interviewed? How are teh repayments going to be made?

 

Thanks

[jadeybags]

just wanted to update as a lot of people on other posts say how annoying it is not to hear of an outcome.

Firstly let me say that i am not writing this from a prison cell. We have paid back overpayment for the years we have been asked about ( £4000) . We have recieved letter saying we are no longer entitled to CTC and our claim has been ended.

We dont know if other years will be looked into, if they are we will have to deal with the outcome then.

I will say we answered every question asked of us.

to others in this position I would say try to keep a sane head about you, I know this is difficult but I have learned that all the worrying in the world will not change anything. Medication may help in the short term( it did for me) but taking pills will not in itself solve this problem.

Take each day as it comes , dont worry about what other people might think just concentrate on your family and be strong for each other.

 

That's good news. Glad you came back to let people know. xx

[spotthedog2011]

cancelled

Edited May 1, 2011 by spotthedog2011
cancancelled - read previous post

[help20112010]

I hope you dont mind asking these questions.

Can i ask how long it took to sort it all out? Did you have to be interviewed? How are teh repayments going to be made?

[joemill]

Hi jjscotland. I have today received a letter to say I am being reviewed for 2010/2011 for different income amounts!!! I declared £13 grand but our actual income was £27. I just don't know what to do???? I I just waite for the 25th as this is the date I need to contact them by if I believe the new figure is wrong and they said they will amend my claim???? I would just like your help on how you are dealing with it all now I am scared to death about it!!!!

[Lammie2011]

I'm in the same boat I declared 15000 and our income was 22000 I'm so scared the worse of it is that's what we live on very scared of what is going to happen