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Working Tax/Child Tax Credit and Overtime ...Help!


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A family member is having a problem with her working/child tax credits so I offered to try and help her out via the lovely CAG members.

 

She was working 16 hours a week but increased to 22 hours a week last year, which she declared to HMRC, so has been expecting an adjustment in her tax credits and housing benefit. They have recently written to her asking for £1,149 back.

 

Over the last six months or so she has come under a lot of pressure from her job to work overtime as they have so much work on. She was hoping this would not be taken into account as it isn't usually a regular thing. However, one month she worked an extra 40 hours (this is the exception rather than the rule though).

 

HMRC are now asking for six months back payslips and these will, of course, show all the overtime she has done. She is really worried that she will get into a lot of trouble because of this and that she will go to prison! Is this likely to happen? She hasn't deliberately set out to defraud, the extra money has enabled her to treat her little girl to a short break, clothes etc and to buy some much needed bits and pieces for the house. Is regular or irregular overtime taken into account for working/child tax credit purposes?

 

Any help would be most appreciated please. Thanks in advance.

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if it is going to be regualr overtime (ie at least for the next year) they can make adjustments to her payments. Any irregular payments are normally only considered when the annual income changes up or down by £2500 so she wouldnt have needed to notify them and it may be that there will be no reduction in this years' WTC and she doesnt owe any money for overpayments. However, for HB it is total income that is what counts so she may well have to pay back money there. Again, it is important that the wrong assumptions about this years income are not made based on irregular overtime paid last year.

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Hi ericsbrother, thank you very much for your reply. The overtime has more or less come to an end now as the busy period has passed.

 

Sorry, I got it wrong, it is actually the Housing Benefits people who are chasing my sister, not HMRC. So, it sounds like my sister's housing benefit will be affected because of the overtime over the last six months or so? I'm not completely sure what you mean by the wrong assumptions about this year's income not being based on irregular overtime paid last year??? Do you mean that they will assume her income this year will be the same as last year, even though it will be less? What would be the best approach when drafting a letter to the Council? Could you, or someone else possibly help with some pointers for us to draft a letter for her? It would be most appreciated if possible. Thank you.

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