Problem with tax credits

[CCNIRELAND]

Hi, looking for some adivce, rececived a letter from the compliance operations this week request information re: my tax credits as a single person for the period up to 5 April 2011.

Stating that there records show my partner name is living at my address, hand up yes. I'm going to phone them tomorrow to get it over with,but what i need to know how far do they going back. my partner want me tell them he in moving in since being of this year, but i feel they will know it's long, my partner keeps saying they need to prove it, i keep telling they can go into our bank accounts and check. every other information that i have given them in the past has be right the amount i earn, i don't claim child care costs. also i read that they add pently on ,how much would it be,could someone give me some adive before tomorrow. thank you

[rebel11]

Hi CC

 

Welcome to CAG

 

The guys will be happy to advise as soon as they are available.

 

You've got your own thread.

[Life-Goes-On]

The only advise you will get on here is to be honest with them. Whenever he moved in, that's the date you give them. Sound like what your partner wants to do is for you to commit benefit fraud and that won't be condoned on this site.

[ErikaPNP]

You are correct in that they can go into your bank accounts without your knowledge and without your consent and your bank is legally bound to provide this information to them. There are also a host of other areas they can look into.

 

They can go back as far as they choose to - and if they find you have been living together longer than you said, they are likely to turn any civil investigation which will incur an overpayment with penalty into a criminal investigation which will incur an overpayment and could incur prosecution and a sentence. As they know he is living there, it is also possible that they know exactly how long for. Sure they have to prove it but it appears to me from your post that they most pronbably already have the evidence they require.

 

How much a civil penalty will be depends on how much has been overpaid, it can go up to a maximum of £3000. Providing them with a full disclosure can result in having a civil penalty reduced by up to 50%.

 

If you have a look around this forum, you will find plenty of others who have committed tax credit fraud who have given a full disclosure and only had a penalty and an overpayment to repay.

 

Lifegoes on is correct in that we don't condone fraud here but another reason we encourage honesty here is because it's damage limitation - as I outlined above. Honesty can reduce any penalty and can in most cases lead them away from prosecuting. If we were to tell you to continue the fraud by lying about when he moved in, it would be like handing you a spade and telling you to dig a deeper hole for yourself.

[James 01]

How much a civil penalty will be depends on how much has been overpaid, it can go up to a maximum of £3000. Providing them with a full disclosure can result in having a civil penalty reduced by up to 50%.

 

The £3000.00 is correct but unfortunately the reduction is incorrect because there is no voluntary disclosure so there will be no reduction.

[ErikaPNP]

The £3000.00 is correct but unfortunately the reduction is incorrect because there is no voluntary disclosure so there will be no reduction.

 

The reduction of a penalty is correct. If the OP discloses all of the information HMRC are now asking for, they may reduce the penalty. If she chooses not to provide a full disclosure, then there will be no reduction. The penalty reduction does not necesserily require a voluntary disclosure before they are caught, but it does require a full disclosure once they ask for the provision of information.

 

Civil investigations

 

The aim of a civil investigation is to get back any tax credits payments that have been falsely claimed through fraud, along with any interest. The Tax Credit Office will also charge a financial penalty. A civil investigation does not prosecute. The Tax Credit Office will offer a person the chance to co-operate with them and tell them all the facts. This is known as making a full disclosure. To encourage someone to co-operate with them, they’ll consider lowering their penalty. The amount they’ll lower it by depends on why the penalty's being charged:

 

• if it's for giving wrong information they’ll reduce it by up to 50 per cent
  
• if it's for not telling them about a change in circumstances, the amount they’ll reduce it by depends on if it's the first time it's happened and the amounts involved
  

When the Tax Credit Office is sure the person responsible has told them all the facts about the fraud, they’ll work out how much the person has to pay.

>>>>

[James 01]

Nothing has changed in law on penalties since the Tax Credit Act 2002 but what has changed is the way they are administered since April 2008. The attached link seems to confirm that a reduction is only given where disclosure is voluntary:

http://www.hmrc.gov.uk/manuals/ccmmanual/CCM10780.htm

 

As in this case the OP is already contacted there will not be a reduction.

 

I think you are referring to penalties before April 2008 where there was a reduction for co-operation and the guidance in the manual states the difference to and from April 2008:

http://www.hmrc.gov.uk/manuals/ccmmanual/CCM10000.htm

 

Very little in legislation on penalties but a lot written about them.

[ErikaPNP]

I am referring to current information which is clear in that when tax credit open an enquiry and discover fraud, or potential fraud, they will give the claimant the opportunity to co-operate with them by providing a full disclosure and if provided, a penalty may be reduced. I've dealt with quite a few of these enquiries and penalties have been reduced. However I do agree that the link you provided, which is also very clear in that a penalty would be charged with no reduction appears to contradict the link I've provided which is quite scary given that they are both current information directly from the horses mouth.

[James 01]

I think the link posted refers to the pre 5 April 2008 system. The attached (page 9) http://www.hmrc.gov.uk/leaflets/wtc7.pdf also states a reduction is only given when a person discloses before a check is started. It is only based on behaviour and the overclaim after a check is started. It is extremely unlikely the guidance manuals / and leaflet (dated September 2010) are incorrect. Were the cases referred to taken up before 5 April 2008 but finished after 5 April 2008 so still come under the old system as they were started before 5 April 2008? It is when the check started is what counts not the year(s) or when the check is finished.

[ErikaPNP]

Nope, that link I provided is current. If you go into the HMRC website and navigate it yourself to that page, you'll see it. Old information which is no longer applicable is archived elsewhere on the HMRC website where it will clearly state in bold at the top that the information is archived and should not be applied to old cases. As I said, I have advised on a few cases just like these, this year has seen me deal with more of these claims that normal and those claims have had a reduction in the applicable penalty.

[James 01]

Sorry I have to disagree. If you look at the 2 links in post 7 to the guidance manual you will note the guidance for before April and the HMRC web page agree as they fit together. If you read the guidance for after April 2008 it does not fit with the web page. Reason ? the web page has not been updated to take into account the changes from April 2008. That is why there is the contradiction. This is also confirmed by the link in post 9 (leaflet dated Sept 10) which agrees with the guidance after April 2008. Of course I have no knowledge of the cases you refer to ,but I think you will agree under the current system there is no reduction due (although may be given in error in the cases you refer to) after a check is started unlike as there was under the previous system. Don't bother with the web page and go by manuals and leaflets as they will be correct so it is best to go by them.

[ErikaPNP]

James, I have no desire to argue with you, nor do I take issue with your disagreeance - all I care about is getting the right information out there, and in my personal experience (and recent experience) in dealing with these tax credit claims, penalties have been reduced in such cases. That may well be an error, and to be frank it would not surprise me in the slightest if every case I have dealt with has had a penalty reduced errenously but it does beg the question - if HMRC staff are not able to comprehend the correct manner of doing things (reducing a penalty when they shouldn't) how can claimants with no experience of claims have that expectation placed upon them?

[honeybee13]

Sorry I have to disagree. If you look at the 2 links in post 7 to the guidance manual you will note the guidance for before April and the HMRC web page agree as they fit together. If you read the guidance for after April 2008 it does not fit with the web page. Reason ? the web page has not been updated to take into account the changes from April 2008. That is why there is the contradiction. This is also confirmed by the link in post 9 (leaflet dated Sept 10) which agrees with the guidance after April 2008. Of course I have no knowledge of the cases you refer to ,but I think you will agree under the current system there is no reduction due (although may be given in error in the cases you refer to) after a check is started unlike as there was under the previous system. Don't bother with the web page and go by manuals and leaflets as they will be correct so it is best to go by them.

 

Hello James.

 

It might help us if you could give us some idea of your experience in benefits if you can. Fwiw, mine is as an IB claimant who had to go to tribunal, so you know.

 

In my experience, manuals and leaflets go out of date, so you can't always be sure if you have the right one. Equally websites I can see, but the date is was updated should be shown, shouldn't it?

 

Please be gentle with Erika, we love her .

 

My best, HB

[ErikaPNP]

I believe that James is providing what he believes to be correct information based on whatever experience he has but I also believe what I have provided is correct, based on the experience I have. The issue is that both of our information appears as current but both cannot be correct.

 

Either way we are left in a catch 22 situation where people posting here are not sure who is correct and it isn't fair to hijack a users thread with our discussion, nor is it fair for incorrect advice to be bandied about - one of us have got it wrong and to be absolutely honest I'm not entirely sure which one of us it is. I have advised people based on what HMRC tell me. I'm happy to admit that I'm wrong and that the HMRC cases I have dealt with have had errenous decisions made on them by inadequately trained staff if that is the case, because as I say all I care about is getting the correct information out there.

 

To that end, I've fired off an email to HMRC asking if their web information on these types of cases is 3 years out of date and asked that if it is that they rectify it.

[James 01]

That's OK Erika - thanks for the reply. I didn't want an argument either.