Massvie Tax Credits overpayment

[Yam950]

Please can someone help, we dont know what to do.

 

We have had a letter today from HMRC saying we have ben overpaid £6000 from April 2011-April 2012

 

Oct 2010 my husband and i started new jobs within weeks of each other and HMRC were informed. In April 2011 i informed them of our earnings for that year. During 2011, we bought a house and moved to a completely different area, new job is about an hour away now. At NO TIME did we receive any correspondence from HMRC and to be perfectly hoenst never gave it a thought.

I renewed as per usual a coupleof weeks back when the renewal pack came. Told them our earnings and that was that. Then the letter lands through our door today....£6000 over payment.

I called and the woman said we should have known from our wage slips we had earned far more than we had told them, i never even thought about it! But if we have been overpaid then we will pay it back, but i dont know how we are goign to to that. We are in debt up to our eyeballs and are trying to work hard to pay it back...my hisband is doing 50+ hours some weeks to try and get us straight. What HMRC use ie: before tax pay is rubbish, we earn nowhere near that once all stoppages have come out. We have no spare cash and im seriously worried. I suffer with anxiety as it is and im having a meltdown right now.

Also, when i worked out the payments, they paid us £5000last year so how can we owe over £6K??

My husband is going mad, he's saying that it cant be right,

 

Please help I am worried to death.

[Gbarbm]

Hi

Go onto the HMRC website and enter COP 26.

This us the code of practice in respect of tax credit overpayments; check that HMRC have not made any errors regarding Making use of the information that they were supplied with.

HMRC will usually deduct the overpayment form a subsequent award or they may recover it by direct payment.

You can set up a time to pay arrangement with HMRC in order to repay the tax credits.

You will need to prepare an income and expenditure report for both you and your husband in order to substantiate the time to pay arrangement

[Yam950]

Thanks Gbarbm. I gave them the information they asked for every April since we have started working. They are adamant they sent us several letters through the year reminding us to check our earnings and make sure we were right. I dont recall ever getting any reminders of any sort and even if we did i thought the info we had given them off our P60s was right! We just dont have any spare cash,we bought a house last year and we're in it up to our necks as it is.We re just about keeping our heads above water, but my husband is talkign about going bankrupt now becasue he is so fed up.

[Gbarbm]

I know it's frustrating, but just download the COP 26, see if any of the examples in there fit your situation.

Appeal against the overpayment, ask them to provide details of the reminders they allege were sent to you.

If worst comes to worst and you have to repay an overpayment you can discuss time to pay with them

[folle]

Hi i had a problem with overpayment with tax credits as they said i was living with my husband and wasnt, we had a child joint bank account ad it had an overdraft ex was in london, the tax credit people are one of the better depts to deal with. The first tax person i spoke was awful, and i ended up having a massive breakdown , off work for 2 and half months . My best advice would be go to cab, they are very helpul , i had to pay back 12 grand.

good luck folle

[Yam950]

I have had a look at COP 26 and im not sure if any of that applies to us. We started work in October 2010, in April 2011 i gave them the information of both our P60's. My husband gives me a sum each week for housekeeping and i did not know hat he earned up until recently when we had a blow out about it....thats not an excuse but when i gave them the P60 info this April it was a lot more than last years.I couldnt have checked through the year becasue he gave me a set amount every week out of his pay so I wouldnt have known anyway. I havent called them yet as im too frightened that they are going to ask us to pay back a lot more than we can afford. We have no spare cash at all and im very very worried.

[Gbarbm]

The thing is you gave the details off the P60 for 2010/11, HMRC would see that the date of commencement shown on the P60 would be October 2010; they should have forward projected the figure over a 12 month period for the purposes of using that as an income figure for 2011/12. If they did not do that then they have failed to make proper and timely use of the information with which they were supplied.

I would ring or write to them and tell them this, you could quote them this statement from the COP 26;

When you make or renew your claim we should accurately

record and use the information you give us to work out your

tax credits and pay you the correct amount.

It is likely that there will be an overpayment, but if they have made an error then the amount could be remitted.

Worst case scenario is that they will recover it from a subsequent award (their prefered method where there is an on going claim) or if there is no subsequent award a time to pay arrangement.

[Yam950]

Just an update.

 

I DID give them information from the P60's which would have been the amount from October 2010 when we started work to April 2011. I also included my husbands benefits prior to that, so i am a tad confused.

 

I called the payments place today to see what the score is, as i am already paying back an amount from 2009 which was a single payment and they said at first there was a record of me setting up a payment plan but no record of me actually paying it!!

After some insistance i was and telling them my bank statement showed this he went off and came back and said it was actually TWO overpayments I was paying back and it had been set up wrong, This is news to me i was not aware there were 2! He said i am paying off the last overpayment before the first overpayment hence why it is not showing as being paid (confused?? I am!!) He said the overpayment was £300 ish,,,,but i have been paying £23 a month since 2010 so by my calculations i have overpaid them.

He said that we had to set up a seperate payment to pay this new overpayment off as becasue the first overpayment was a single claim and this is ajoint claim...they cannot run one after the other.

 

I am REALLY confused now and do not understand whats going on

I got quite upset while on the phone with the man at HMRC and even worse when he said we would get a debt collection letter.

 

I dont know what to do

[Gbarbm]

Lord what a shambles!

Write to:-

Mike Falvey

Chief executive

Benefits and credits at the address on the tax credit correspondence.

Head your letter complaint in bold capitals underlined

Send it by recorded signed for delivery

Put the details in your letter as you have posted here.

If you need further help then just post back here

[Yam950]

Thanks Gbarbm. I am so fed up. If we have been overpaid we will pay it back, im just at my wits end now and when he said we will get a debt colelction letter i just went to pieces. I am goign to dog out past award letters and see what they say and i will post back. Thank you again x

[Yam950]

Ok, so im just going through the awards as follows - hope this makes sense to someone becaus it definately doesnt to me.

 

I have the following:

 

Amended tax credits award for 06/04/2010 to 05/04/2011 which says i have told them we started work in October 2010. I gave them an estimate of £12000 for me (my salary was £24K) so 6 months left, and just over £9k for my husband as that was what we worked out he would be earning up till the april giving us a combined income of £21438

This was dated 15th November 2010.

 

I then received an annual review dated 04/05/2011 in which it states that i had told them we both started work in October 2010 on the dates shown which was correct as was everything else so i called and comfirmed it was all fine.

 

The next one i have is dated 22nd July 2011 -my husband had been getting Jobseekers prior to his new job and we didnt know how much and had to chase the DHSS for the info so were late passing that on. We also changed bank account which the letter acknowledges. It says it is an amended award for 06/04/2011 to 05/04/2012. This one states that our income for 6 April 2010 to 5 April 2011 is based on an estimate provided by us and gives a combined income of £23154. It was an estimate because we never got the amount from the DHSS so had to work it out, but our income was given from the P60's as being £10838 for me and £12316 for my husband

 

It actually says on this award (and quote):

Income gone up? - tell us now to keep your payments on the right track. This does not usually affect your tax credits payments for this year. They will stay the same until April 2012 as long as there are no other changes in your income or circumstances (this is REALLY confusing!)

From 6th April 2012 your payments will be based on an income of £23651.80. If your income is more and you do not tell us yo umay be paid too much from April 2012

 

It also says check all the details are correct...which they are!

 

I then had another one dated 7th Feb 2012 which is a Final tax credit decision for 06/04/2010 to 05/04/2011 ( i am REALLY confused by now as its feb 2012 and they are sending me a final decision for 2010/2011??) which is an exact replica of the one dated 15th November.

 

It is now from April 2012 they say we have been overpaid to the tune of £6000. This is what i do not understand. When we started work in the october I told them, and told them or actual income in the April, so have they failed in their duty ie: Have used a 6 month wage instead of projecting it to a 12 month income therfore giving a much lower figure?

 

I cannot for the life of me figure out how this has happened. Is it obvious or is it me being thick? I can scan in the letters etc if anyone can help me and needs to see them.

 

Thank you

[Gbarbm]

It sounds as if they may have made an error.

I'll be interested to see what they send you as HMRC don't usually go straight to debt collectors. They will collect any overpayment from a subsequent award (their preferred method) or arrange to collect it from you direct via a time to pay arrangement.

So let's see what they send you and we'll take it from there.

Please try not to worry, it really isn't as bad as it looks honestly

[Yam950]

Thanks Gbarm. Do i dispute it or do i wait? I havent sent in a dispute yet, but looking at the paperwork, it seems as though they have made an error...nowhere on any paperwork does it say they will be using £23651 to calculate 2011/2012's tax credits. All it says is "this is the information we have please check it is correct for 2010/2011"... which of course,...it was!

[Gbarbm]

Wait until they write to you and then you can appeal against the overpayment on the grounds that they did not make proper and timely use of the information with which they were supplied.

In some cases, if it can be shown that HMRC made an error, then the overpayment can be fully or partially remitted

[Yam950]

Thats just it though....i dont know if the information i have actually proves they did. All they did was send me quite a few award notices and amended award notices asking me if the information for that period was correct....which it was.

 

i have it all written down in date order as i have written the grounds for appeal today, but havent sent it yet if you want to have a look at it? I can PM it to you?

[Gbarbm]

Hi

By all means PM the paperwork to me

[Yam950]

PM sent...i hope its not too confusing.

 

And thank you

[rds60h]

Is it any wonder Tax Credits are always "cocked up" they ask you to provide details of last years earnings and situations to provide this years Tax Credit. What is the point of giving details of a job you were in last year earning £100K per year when if now you have been laid off and are now working part time for £5 per hour !!!

If you are PAYE the Tax System has all the details of your income and your situation (ie part-time/full-time,married,children etc) they do not need any other information to calculate how much tax you should pay !!!

But by using Tax Credits they put the emphasis on you to update details and notify them, so they can then bodge it up.

They are then hoping you will be so scared of another cock up that you will not claim again as many (I did this myself) are now .

[Greer8472]

Is it any wonder Tax Credits are always "cocked up" they ask you to provide details of last years earnings and situations to provide this years Tax Credit. What is the point of giving details of a job you were in last year earning £100K per year when if now you have been laid off and are now working part time for £5 per hour !!!

If you are PAYE the Tax System has all the details of your income and your situation (ie part-time/full-time,married,children etc) they do not need any other information to calculate how much tax you should pay !!!

But by using Tax Credits they put the emphasis on you to update details and notify them, so they can then bodge it up.

They are then hoping you will be so scared of another cock up that you will not claim again as many (I did this myself) are now .

 

They put the emphasis on me to update them with my details which was a change of employer and they cocked that up too. Once I informed them of that I now owe them money a error on their part which they admitted butt hey fail to correct it. A simple thing and they make a mess of it. I know how the OP feels like in terms of cock ups.

[Yam950]

Well my letter has been tweaked adn will be sent recorded tomorrow.... so now we wait.

 

HUGE Thank you to Gbarbm for the help and advice.

 

I shall keep you all informed.

[Gbarbm]

x

[Yam950]

Just an update. I sent the letter by recorded deliver around 10 days ago. In the meantime both myself and my husband have received a letter regarding the overpayment and enclosing a bank giro credit slip for the full amount. Surely we should have received one each for half of the full amount!!!

[Gbarbm]

You would have thought do seeing as it was a joint claim.

Write to them again (send by recorded signed for delivery - I know it's a pain, but you'd be surprised how many government departments say they never received the correspondence) telling them that the claim is joint and should be split 50 50.

Also request time to pay if you cannot afford to pay the amount in full

[Yam950]

So i have received a response and they say that the overpayment is due to an increase in our income...yes I know that! However they say they sent us an award notice in May 2011 which i have, and they said we were told it was based on our 2010-2011 income as they did not have our estimated 2011-2012 income. This is not true.

The PROVISIONAL notice they speak of gives all the usual info about our family then says:

Income: Your income for year 6 april 2010 to 6 april 2011

This income is based on an estimate provided by you - all of that is correct for that year

 

It also says: Income gone up? This does not usually affect your tax credits payments for this year. They will stay the same until 5th April 2012 as long as there are no other changes in your income or circumstances (confused?? yes i am!!)

 

NOWHERE on this award does it say our 2011-2012 award is based on the estimate for 2010-2011 - i would have informed them if it had!

 

They also say that we have not met all our responsibilities set out in their code of practice becasue they say we delayed in informing them of our correct income....no we did not. Every single award asked us if the info was correct and if anything wasnt to contact them. At no time did any of these notices ask for an estimate of our income foe 2011-2012. I have them all.

 

What would be my next step now? They say they will only look at their decison one more time and then if they do not agree we will still have to pay it back, so im not sure how to proceed. I am prepared to go all the way with this i just need to make sure we do everything right.

 

Edit: I also forgot to add, they say that in my letter i said that if we had to pay it back it would cause us financial hardship. At no time did i mention any financial hardship in my letter, and they have not acknowledged my other complaint int he same letter about the bloke on the phone telling me i wasnt paying back a previous overpayment when i have been every month for 3 years, who then said someone had made a mistake setting up my repayment plan!

Edited July 21, 2012 by Yam950