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Ommission of dividend on tax credit forms - fraud??? can't sleep for worrying


Blondie1967
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I'm living a nightmare!!! In hindsight I now realise that I've left off the dividend payments for my OH for the last 2-3 years. We struggled to get a mortgage as he runs his own company and the bank did not take dividend monies into account as part of his income.... very, bloody stupidly I realise I've left this off the tax credit forms thinking that if the bank doesn't recognise it as income it was the same for tax credits. I only realised my error when reading an email from the guy who helps with finalising his company accounts who set out the figures for income, Corporation Tax and Divident for the year 2010/2011. I immediately phoned the Tax Credits office as I had only that week posted off the signed forms leaving off this amount!! The lady said she had not received my forms but would add a note to the file for when they arrive to declare the divident. What should I do? Should I follow it up with a call to see what happens next or leave it to them to contact me?? By my calculation we should need to pay back around £9,000 for the current year and similar amount for 2009/2010 and around £4,000 for 2008/2009 around £22k in total. I'm fully expecting them to throw the book at me for being so bloody ignorant TBH but how can I can minimise the damage???? if at all...... I'm really, really stressed out and more than a little mad at being so stupid.

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I mentioned the figure for 2010/12 as I had it to hand and then mentioned for the previous 2 years I would need to get these from the bookkeeper who helps us as he only provides a P60 for each year. She would put a note on the file. Does this mean they will come back to me for the other 2 years figures or should I phone them she was not specific at all and seemed more interested in waiting for the forms to arrive and be put on the system.

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I am by no means a tax credit expert (I have my own thread open at the moment about them lol) but I would say that the best course of action would be to wait until your award notice comes through (after they have finalised your award). Detailed in your new award notice will be details of what to do if you believe it is wrong.

 

I believe at the moment though they have around an 8 wk backlog (thats what it says on automated system when you call them).

 

ERIKAPNP posted this earlier on another thread which may help you work out how much they would take off you:-

 

"The easiest way to find out how an overpaymentwill be recovered (and the percentage) is to look at your tax credit award notice, under 'part 2', entitled 'How we work out your tax credits'.

 

If that part shows no amount for 'reduction due to your income', they will take it back at a maximum of 10% of your ongoing payments.

 

If it shows an amount under 'reduction due to your income' but you are still getting more than the family element of Child Tax Credit (approximately £545 for the year), they will take it back at up to 25% of your ongoing payments.

 

If your income is high and you only get family element of Child Tax Credit (approximately £545 for the year) they can take anything up to 100% of your ongoing award, which means they can stop paying altogether"

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The dividend for the current year according to our bookkeeper is £31k!!! I've had another sleepless night and hope my OH can put a call in too the CAB today so see what they can suggest as I am so so stressed.

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Seeing as how you have already posted your declaration I would wait until your new award comes and then advise them. Your award tells you to read through the details and to contact them if anything is incorrect. You having phoned already and a note put on the system means that you are not misleading them in anyway.

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That must be a hefty dividend payment to reduce your tax credits by that much - are you sure you worked it out right?

 

Hello Lee and Blondie. I believe accountants are [or were] keen on using dividends as income because you earn more that way. I think it was to do with NI deductions, but I don't have current knowledge.

 

My best, HB

Illegitimi non carborundum

 

 

 

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