Tax credit overpayment

[The Phantom]

Hi all

had a letter from HMRC dated 31.07 stating I had an overpayment of £573.37 on my award 2013/2014

 

All it says it that they will seek to recover it from me but no further information.

I won't be able to repay that in one lot, does anybody know if they accept part payments or instalments ?

 

The overpayment I think was due to my income. I was made redundant last year and had a redundancy pay out. It was taxable by the looks of it and was added to my P60 hence my income was £3000.- higher than thought. I didn't realize a redundancy payment would in part be added as a taxable income. So my fault I suppose.

 

I have since moved in with my partner and found a new job, so not claiming tax credits anymore, but the final award for the 2013/14 period shows this overpayment .

 

Has anybody got any experience how I can repay that if i can't pay it in one lot ? I.e. what options I have ?

[scotgal68]

wait until the overpayment collections contacts you and then negotiate a repayment amount

[blondebubbles]

The first £30,000 of any genuine redundancy payment is non-taxable. However things like holiday pay etc are taxable.

 

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04111.htm

 

How much did you receive and what was the payment made up of?

 

If the overpayment is correct then once you receive the notice to pay letter it provides you with a contact number to call to discuss repaying in instalments, normally over 12 months but can be longer depending on circumstances.

[*RainbowTears*]

I too received a very similar letter, around the same time, also stating I had an overpayment,but from 2012!!

 

Like yourself, mine also said they would recover the overpayment.

 

I then received a further letter yesterday that stated, my overpayment was for £96.57 & attached to the letter was a payment slip.

 

So maybe you too will also receive a similar follow up letter. If & when you do, just give them a ring & as BB says above, you should be able to pay it off in instalments.

 

For me personally, I have no idea why I've an overpayment from 2012, as every year, I give HMRC the exact figures that's on a P60 & my IB letter!

[bjoh69]

I too have just a tax credit overpayment letter for 5k.i did claim tax credits due to my income but because im a workaholic I did some overtime over the year and the the next year I told them what to do with their tax credits as they said they overpaid me but still left with what they say I owe.it is a joke to say work pays when you have to pay back to them some of your earnings.

[The Phantom]

Many thanks for all your replies. My redundancy pay-out was made up of the compensation plus the pay in lieu of notice, as I had been with the company for almost 20 years they had to give me three months notice, so there was a payment in lieu of notice and hence taxable , but my final pay had it all lumped in as one figure, I didn't realize some of it was taxable and some of it wasn't. The taxable bit slipped when I told HMRC about my income, but when they did the final figures it was of course on my P60 and my actual income was therefore higher which knocked me over a threshold , hence the overpayment.

The oversight was on my side , so I can't really argue with this.

I just can't pay it all in one go. And on the letter/ notice they don't tell you how you can pay.

Going by the replies here I am going to get a second letter shortly then detailing that.

I will wait for that and see if I can come to an arrangement with them for monthly instalments

[goodatresearch]

Did you actually receive £30,000 with no tax on it as your entitled to I.e. the bit your calling compensation?

[The Phantom]

Good Lord, no I didn't get that much. My company only paid the basic statutory redundancy plus 3 months in lieu of notice as they wanted us all out within a few weeks.

So I got one payment as my final pay which included the statutory redundancy payment including 3 months pay in lieu of notice, and those three months in lieu of notice were taxable although they were included in the entire payment if you see what I mean, so I should have worked that out but I never did. I just thought the entire amount was tax free as it was redundancy and I was wrong in that assumption. I am just a bit crossed as I think my company should have showed the amounts separately but they didn't. My bad.