Income Discrepancy on Tax Credit Award 2009/2010

[Retty]

Hi,

Am worrying myself silly here. I received a letter from HMRC Compliance saying that the amount I had stated as earnings is different to the amount they have on file from my employer and if I don't agree with their records to call them otherwise they will adjust my award according to their records. Having read the letter I realise that I made a stupid error on my TC form last year. I put my total net and not gross amount, worse still it was just an estimated amount (I took the current payslip and x it by 12), the difference is 6.5k. I did not take into account any bonuses etc. To be honest I was too scared to phone them as feel so embarrassed (and their opening hours are 8.30 - 5.00 and I am at work during those hours and could not phone from work without people hearing me). The letter says "What you need to do now", and then just says if I don't agree to phone them otherwise they will change my award. I don't disagree with them and the date to call them has now passed. I am not sure what to expect next (other than a massive bill & looking online I can be fined up to 3k?), I am also worried about how I will be pay them back, I couldn't pay back lots in one hit. I am also worried about being able to pay rent, bills etc if they want huge payments back straight away? My daughter keeps asking me what is wrong as I keep bursting into tears

[ErikaPNP]

They can reduce your current award to reclaim an overpayment but when they do this, you have very little control over how much they take. Even though the date has passed, it is in your interests to contact them because you can't hide your earnings; they know. They can charge you a penalty yes, but they may look at reducing this by up to 50% (I have seen some cases where they don't charge a penalty at all) if you provide them with a full disclosure. Can you not ring them during your break?

[Retty]

oops pressed button twice

Edited February 10, 2011 by Retty
duplicated

[Retty]

I don't mind paying back any money that has been overpaid and if they need to amend my award or stop my payments until it's recouped then I have no problem with that, afterall it's me that's made the error here. I am just worried about what happens next. I did not call them as previously said as I realise it's my error and I can't argue with it. I don't dispute their records and it says to phone them if I don't agree with their records but I do. I was not sure of what I could phone and say really? Other than sorry I have made a mistake? They only say to call them if I disagree.

[ErikaPNP]

In that case, I'd say you have little to worry about as you have followed their instructions in not phoning because you don't disagree with them. Does the letter mention a penalty? If not then that is also unlikely. They will adjust your award as they state; whether this means reducing or stopping your tax credit would depend on how much the overpayment is, and how much tax credit you receive. If stopping your award would create hardship they must take that into consideration.

[James 01]

There may be a penalty but there will be no reduction as there is no disclosure before the check is made.

[Retty]

The letter itself does not mention a penalty but the enclosed standard information sheet says that penalties can be charged, however if you basically give what they ask for then they can reduce or choose not to charge a penalty. The letter however does not ask me to do anything or provide any further information. Only to phone them if I disagree with the records that they hold. They are however still paying the full amount and I want all payments to stop until this is sorted out as I will just have more to pay back, therefore if another payment goes into my account I want to phone and tell them this - do you think this is reasonable and would they stop all payments until this is worked out? I'm not sure that I will even be entitled to the WTC element anymore as it looks like from previous threads that as soon as you hit 20k (and I am just over that) this part stops.

[Retty]

Now even more worried. I emailed Hylton Potts (they deal with any tax issues), and they have advised "

Thank you for your email.

 

You have come to the right place. This is what we do. We do not take on all the cases

offered to us, but here I am sure we can help you.

 

The correct approach is always to go to them before they get to you, because if they do there will be a criminal investigation, and an interview.

 

The next step is almost certainly an arrest, and an interview at a police station under caution. They thrust documents at you without warning, and try to catch you out, and a prosecution is far more likely if they think you are not being 100% straight with them.

 

We aim to nip this in the bud, and make it go away.

 

We do not allow our clients to be interviewed.

 

What we do is to contact the HMRC, discuss the allegations with them and, if necessary, prepare a statement for you. We do this in private and in confidence with you, and the aim is to send it by post, to avoid an interview.

 

Also, in appropriate cases, we submit medical reports, often from sympathetic and helpful private doctors, and character references.

 

This minimises the chances of them deciding to prosecute, or a prison sentence if they do.

 

The Fraud Investigators know us all over the country and love our approach. We make their life easy, and keep investigation costs down.

 

Unlike experienced Legal Aid solicitors, we do not ask for copy documents for the sake of it, or treat them like idiots, which they are certainly not.

 

Invariably the response is “Thank Heavens you are involved. How can we sort this out ?”. As far as I know our approach is unique.

 

If you want to go ahead please complete one of the attached forms, signing and inserting £195, and return it by PDF or fax. This guaranteed"

 

I now feel sick.

[James 01]

Under no circumstances pay anyone anything. The worse that will happen is a financial penalty. Call and agree the figures and don't involve anyone else.

[Retty]

So you don't think that I will have the police coming to arrest me then as the letter states that I will?

[ErikaPNP]

If HMRC were planning sending the police to arrest you they certainly would not put that in a letter. Even where an IUC takes place it very rarely involves the police in tax credit matters - the police only become involved in extreme cases. Yours is not an extreme case, far from it - unless there are other matters that you haven't mentioned.

 

I'd take advice on this issue from a company run by a person who has been struck off as a solicitor after being convicted of conspiracy to defraud in the same manner as I would take a prescription off Dr Harold Shipman if he were still alive. I'd toss it in the bin.

 

You have not been accused of a criminal offence; and with the HMRC the next step is almost certainly not an IUC. The next step is adjustment of your award. The HMRC do not prosecute cases as readily as other government departments. They have made the position clear in their letter. They have found out about your income and will change your award in reflection of this. If you disagreed with their findings you had the opportunity to contact them and say why. You don't disagree, so didn't contact them. So they will adjust your award, as they said they would.

 

Of course the company you emailed has responded with what they have. They want your money, and they aren't going to get it by telling you everything is fine and you don't need their services - which in my view you do not.

[James 01]

Stop worrying about this- unless you have committed other offences for which HMRC have responsibility for

i.e.offences relating to arms and weapons of mass destruction trafficking then you have nothing to worry about.

Seriously though somewhere on this site it states they rarely prosecute and go for civil recovery. As already stated the worse is a penalty can be charged.

[Retty]

Thank you for your help. I certainly am not a trafficker of mass weapons..thanks James that made me smile. Sorry one more question... even they have said I only need to call if I disagree, do you think I should phone them and ask them to stop my payments to prevent a bigger debt & also to say that I do agree with their records and it's my mistake or just wait until they send the adjustment through? What do you think is the best option for me? Many thanks in advance and I do apologise for asking so many questions.

[Retty]

Just to update I phoned the office today, accepted their figures, also advised that I have just been notified of a wage increase from Jan this year. Asked if awards and payments could be amended asap as the normal amount was still being paid into my account. The lady was nice enough, said she will amend and normal TC office will send through new award and any payment that I may need to make. I expect I will get a rather large bill but apparently you can discuss with them about payment plans rather than the normal 30 days in which they want it back.

[jamieprec1979]

Hi, i was due my payment today and have been advised that this has been recalled due to a discrempency of income for 09/10. They have advised i should recieve a letter regarding this and i will need to confirm income. Do you think it is an issue like yours. I have put a figure less my SMP which is approx £2,000 less than my gross as i thought this it what i had to do.

I am unable to pay my childminder and really concerned and feeling sick with all the stress.#

 

Any advice welcome please

[honeybee13]

Hi Jamie. You already have your own thread running on the forum, which I replied to just now.

 

My best, HB