Tax Credit Overpayment

[petehend]

Tax Credit Overpayment

Here’s how the story goes.

On the 3rd February 2004 as instructed my wife contacted the Tax Credit Team (TCT) to inform them that she had changed Job and informed them her salary had dropped from +£25K to approx £10K and my own salary remained the same. Simple phone call thanked for update and informed we would here in due course of changes to our Tax Credit and Working Tax Credit.

 

On the 6th February 2004 we received a payment for Tax Credits £5,917, on noticing this payment my wife immediately contacted the Tax Credit Team (TCT) to inform them that we believed that there was an error and that we didn’t believe that we were due this payment. The TCT advisor informed us that due to large drop in my wife’s salary this was the reason for the additional payment. Once again my wife asked them to check and again confirmed it was correct.

 

On the 11th February 2004 we received another payment for £127.12. On noticing this payment within days we once again we contacted the TCT and queried why we were receiving this payment. Once again the TCT advisor informed us that it was due to my wife’s salary changing and we would receive a payment of £127.12 every week. Sam again my wife stated that we didn’t believe we were due this and mentioned again receiving the £5,917 on the 6th February and again informed this was correct.

After seeking advice from other people we worked with over their payment in line with similar joint salaries, everyone agreed that it looked as though we were being paid too much. Near the end of February 2004 we again phoned the TCT and advised them that after reviewing online tax credit wards we believed there to be an error in our award.

 

In March 2004 we received a call from the TCT informing us that “They” had made an error when my wife initially contacted them at the start of Feb 2004 to inform them of the changes in my wife’s salary. They stated that when they input this new information Mr Henderson’s income was not included. This meant that the award was calculated using an income of £10K instead of £30K. They advised that due to this being their fault they would not seek to request the over payment be repaid immediately bit instead would recover it by reducing our payments in the forth coming years.

Being slightly naive to the Code of Practice rules etc and understanding that we had been overpaid we didn’t query this further. In July 2008 after 4 years of receiving no Tax Credit we sent a letter to the TCT asking as to whether the overpayment could be cancelled as we believed that we had not made any mistakes and had carried out our responsibilities as requested in informing the TCT of changes to our circumstances and informing them immediately of the overpayment.

 

We received a letter from the Tax Credit Office on the 20th October 2008. In the letter they confirmed that the overpayment arose on the 3rd February 2004 when we informed them of the changes in my wife’s annual income. They stated that when they updated their records they did not include my salary. This meant that our award was calculated only on my wife’s salary and as such a lump sum was paid in to my wife’s account. The stated “We are sorry about this mistake”.

 

In the letter they stated that they had been unable to find any evidence that my wife had made calls from around the 7th or 8th February 2004 querying the payment. The letter stated that the officer had listened to a call on the 26th February 2004 during which we queried the payment and were advised that payment was not correct and not to spend the money. The letter then stated “This means that I cannot write of the overpayment”

As stated previously we had contacted the TCT 3 or 4 occasions from receiving the first large payment informing them that we believed an error had been made and on each occasion were told this was not correct. When the letter we received in 2008 stated that on the 26th February 2004 when we contacted them they told us it was an error and the payment was not correct. We cannot remember the date but we believe it was some time in March 2004 before we were contacted by the TCT to tell us of the error. This is backed us by us receiving six weekly payment s of £127, the first being 11 Feb 2004, taking us through to 17th Feb 2004.

The letter we received from the Tax Credit Office in response to our query in 2008 was factually inaccurate with errors in dates, etc. Once again we were naïve and accepted as Gospel that we had not right of appeal on their decision.

 

It is now 2012 and with changes to the Tax Credits we get a letter stating that we no longer qualify for Tax Credits due to our salaries and therefore they are asking us to settle up the remainder of the overpayment.

Initial Overpayment: £6,726

Paid Back: £3,983

Remainder to Pay: £2,743

 

8 Years on and being more world wisely I have started to investigate a bit further.

 

In reviewing the Citizens Advise Bureau Advice Guide on the subject as to whether an overpayment should be paid back. They state that if the HMRC have met all their responsibilities and I haven’t met mine they will ask for full repayment.

 

The Tax Credit Office’s responsibilities

 

When the Tax Credit Office deals with your tax credits claim, they aim to:

 

• Give you the correct advice based on the information you give them.
  

Failed – They informed us we were due larger amount after supplying them information. Admitted they made error in letter from Tax Credit office.

 

• offer you support - for example, if you want them to explain your award notice to you, they’ll talk you through it in detail
  

Failed - After phoning during all Feb 2004 informed our award was correct even after us detailing we thought it was an error.

 

• accurately record and use the information you give them when you make or renew your claim, to work out your tax credits and pay you the correct amount
  

Failed – as stated above and confirmed in letter received from Tax Credit Office in 2008.

 

• Send you an award notice including the information you’ve given them about your family and your income - if you tell them that there is a mistake or something missing on your award notice, they’ll put it right and send you a corrected award notice.
  

Failed - took six weeks to eventually agree they had made a mistake.

 

• accurately record what you’ve told them about a change in your circumstances, and send you a new award notice within 30 days
  

Didn’t receive a new reward notice, payment made in to our account 3 Days after informing them of change.

 

 

Your responsibilities

 

When you make or renew your tax credits claim, the Tax Credit Office expects you to:

 

• give them accurate, complete and up to date information
  

Have always checked yearly tax credit summary and awards, not applicable in this occasion as between years.

 

• tell them about any changes in your circumstances throughout the year so they have accurate and up to date information
  

As soon as my wife changed job informed the TCT Team. Also as soon as overpayment was noticed phoned to inform the TCT and continued to do so until overpayment was recognised.

 

• Reduce the chance of building up an overpayment by telling them about any changes in your income as soon as possible.
  

As above

 

• reporting any errors on your award notice within 30 days
  

Not applicable as didn’t receive award notice until it was sorted.

 

 

• Checking your payments match the amount on the award notice and reporting any errors.
  

Although we didn’t receive an award after informing them of change informed them within days of payment being received in account and continued to contact the TCT until they agreed an error on their behalf had taken place.

 

In reviewing the Citizens Advise Bureau Advice Guide on the subject states that if you have met all your responsibilities but the HMRC haven’t met theirs you won’t be asked to pay back all the overpayment.

 

 

Sorry about going on in so much detail but thought the more information would allow for some advice to be given.

 

Short of it is that we believe that we met all our responsibilities and the Tax Credit Office did not meet their responsibilities and admitted it was their error in a written letter from them in 2008 I therefore believe that we have a case to not pay back all our overpayment.

 

Due you think it is reasonable to ask the Tax Credit office to right of the remainder of the overpayment and if so what is the best way to approach this subject with the Tax Credit Office?

Is it worth while contacting the Citizen Advice Bureau for some specialised advice?

 

Any helps or thoughts on my situation would be greatly appreciated.

 

Regards

Peter

[jadeybags]

I have never known them not to send an amended award letter within days of me notifying them of a change, & they will have records of sending one, even if you didn't receive it. So I would be asking them for a SAR, which will show up that they didn't issue that award.

[petehend]

Hi jadeybags,

 

Firstly thanks for your reply and please accept my apologies if I now ask stupid questions as I am unfamiliar with some of the terminology.

 

I have hyperlinked in to the SAR and the letter template letter appears to relate to a Bank complaint, is the idea I should re-word and send on to the Tax Credit Office?

 

When you say "So I would be asking them for a SAR, which will show up that they didn't issue that award", what do mean by "they didn't issue the award?

 

In getting this information how will this help?

 

Kind Regards

 

[jadeybags]

Apparently you can get a Subject Access request from anywhere like tax credits, benefits, CSA etc. There is a HMRC one about but I don't know the link to it, hopefully someone can post it. It'll basically document every communication. Should do anyway.

[petehend]

Do you think getting every communication will help any more than having a letter from the Tax Credit Office admitting the mistake was on their part. As mentioned previously in the letter they admit it was us who communicated the change and then communicated to them the error in the payments. Therefore under their own code of practice does this mean that we have a case to have all or some of the overpayment cancelled?

[petehend]

Just a quick update. Wrote letter to tax credit office stating all points above and detailing that as I had met all my obligations and they has failed on theirs I didn't believe that I should have to repay any amount. At the end of the long letter I thought let's give it a go and then stated that as the fault was purely theirs that I didn't believe that I should have repaid any amount and therefore the tax credit owed me for the years they did not pay me should be refunded.

 

Three and a Half months later I have received a letter from the Tax Credit team informing me that they agree the fault was purely their own and we will not have to repay and that they agree that they should be paying us for the missed year and will be sending a settlement figure of £3,900.

 

Hopefully my case gives others hope in their dealing with the Tax Credit FxxK up that in most cases has been the fault of the Tax Credit Teams. Keep fighting the Fight

[moneycantbuyyoulove]

Hi can I ask does anyone know - this is sort of similar to what happened to me. hmrc have been overpaying me to the tune of £180 a week. I wrote three times to tell them that my childcare had stopped and that I was no longer eligible and didn't hear anything. Then I assumed that the money must be child tax credit or working tax credit - both of which I was eligible for. I suffer from mental health problems and find it difficult to keep track of my finances so to be honest I didn't realise that I was being overpaid.

 

I know that sounds strange but the money came in very unpredictably - sometimes they would pay too much, sometimes too little, and I never knew how much I was supposed to be getting plus I'm not very organised at checking my statements. I managed not to notice that I was in receipt of child benefit for 9 years but that's another story. I think maybe I have some kind of number dyslexia with bank statements!

 

Anyway, when I did realise I wrote to them and they demanded repayment. I don't have anything like that kind of money (£7k odd). Will I still be made to pay it back? At the moment I am appealing on the basis that it is their incompetence not mine, but they are making me pay it back whilst they consider my appeal. I really can't afford to do that. What is more, they are asking me to go through affordability and asking for details of my new partner's income, which he is refusing to give. This is putting huge strain on our relationship and at this rate he will probably walk out (he already has to pay the higher rate child benefit charge even though it's not his child). The irony of that is that they will have to pay me the full tax credits if he walks out - around £13k per annum last time I checked! At the moment they pay me nothing because I am living with him, even though it's not his child and he doesn't give me money.