Need Advice - Tax Credit Overpayment!

[0gami]

I've just written to my local MP so I might aswell copy and paste it - I need advice on what to do as basically the Family Tax Credit want almost £4,000 off me which I don't have. I'd be very greatful if anyone can offer any advice.

Dear Mr. xxx,



I am writing to you on behalf of my partner Mrs. Goldie, who was recently presented with an overpayment demand of £3905.38p from the Inland Revenue. The overpayment was for Family Tax Credit.

The demand for payment seems erroneous not to mention unjust, given that, in trying to do the right thing, it was my partner who approached the Inland Revenue after her habitation status had changed. The overpayment seems to have come about when, during her enquiry she was advised by the Inland Revenue that since a new claim was being filed (including details about myself), an end of year statement was not necessary.

It is clear to me that the civil servants at the Inland Revenue has in the first place made a seemingly simple error that at the end of the tax year has amounted to a huge financial penalty for us.

When my partner first applied for Family Tax Credit she was a single mother with three young daughters to care for, so was a legitimate recipient of tax credit. When her situation changed she was quick to inform the Inland Revenue of her changed circumstances – little help it did her!

Though my partner’s financial needs have been eased since I moved in with her, we still find it a struggle to make ends meet and to pay for someone else’s error is cruel and unjust.

It is for this reason that as my MP I am writing to you and urge you to take up the cudgels on behalf of my partner and I.


I am an honest man, I am not trying to take anything that I do not deserve, I simply want this issue quashed.



I include for completeness the transcript of the email my partner sent to me explaining her plight; her anxiety is palpable!


“My claim was finishing in September last year, you were moving in so I phoned them to tell them and they told me to make a fresh claim and include you on it. I asked the man on the phone what to do about the end of year declaration of earnings and he said it would be ok because I was making a fresh claim with how much I earned on it, so I didn't send it in and thats why I have to pay it back. Even though they had a form on saying how much i had earned that previous year because i had to tell them on my new form for me and you.



I did my claim for you and me over the internet, I then phoned to ask about the end of year earnings form and the man told me I didn't have to send it because I had a claim going through wich had my earnings on it.”



Yours Faithfully,

Thank you if you can help.

-Ogy

 

[RichieUK]

I'm not sure if the exact ins and outs, but my mam has just been hit with a £3500 bill because of family tax overpayment. She found out about their mistake when it was taking place, but they INSISTED over the phone that they had it right....needless to say they didn't have it right and now she is getting demands for the payment. She has tried several avenues to try and get help, most are useless. She is currently in talks with a specialist lawayer who she got in touch with through citizens advice, but it isn't looking good, she is still receiving demands for payments.

Like i said, i'm not sure of the exact ins and outs, but this is the gist.

Good luck

 

[Roberta]

I was overpaid last year as were a lot of others. It was on the news recently about just how badly they got it wrong.

With me they're taking the money back gradually every month.

 

[RichieUK]

I was overpaid last year as were a lot of others. It was on the news recently about just how badly they got it wrong.

With me they're taking the money back gradually every month.

Are they charging you interest ontop of the orginal sum because you're paying monthly?

 

[Roberta]

Are they charging you interest ontop of the orginal sum because you're paying monthly?

Not that I'm aware of. It was their mistake as I'd provided all the information.

 

[fatiain]

Tax credits are the worst people to deal with, ever. They sent mrs f a lump sum because they'd underpaid. About 3 weeks later (on a saturday, when they're closed) she gets a demand that she pay back £1800 overpayment. She phoned them up, in tears (well just about) they said "hang on" click, click, clickty-click "you don't owe us anything actually"

Absolutely bloody useless.

 

[RichieUK]

Not that I'm aware of. It was their mistake as I'd provided all the information.

My mam was saying they hinted at charging her interest if she pays so much back per month, but it might depend on the amount owed and how long it takes you to pay it back

 

[0gami]

My mrs has been crying her eyes out over this, I've told her not to worry but I can understand why she is.

Can they not just give us less of what they currently give us until its paid off?

 

[Roberta]

My mam was saying they hinted at charging her interest if she pays so much back per month, but it might depend on the amount owed and how long you pay it takes you to pay it back

I'm still in receipt of the benefit so they simply pay me less per month clawing it back that way. It will take about 2 years to pay it back that way though!

 

[0gami]

My MP came back with the following:

Dear Mr xxx

Mr yyy has asked me to thank you for contacting him and for telling him about Mrs zzz's overpayment. In the first instance Mrs zzz needs to write to the:

Disputed Overpayments Team,
Tax Credit Office
Preston, PR1 0YB

to ask for a reconsideration.

It would be helpful if you let Mr yyy know when this has happened so that he can write to the Tax Credit Office to ask that her request as dealt with as soon as possible.

 

[Bar]

The whole process is fatally flawed and I am amazed that no one has truly highlighted the root issues within it.

Basically because they want to pay on absolutes they always ask for you to state your earning in the previous tax year (as you should have this figure from your P60).

You are then paid through the present year based upon the figure you gave them. So your credits for FY06/07 are based upon your earnings in FY05/06.

This system would be fine if no one was ever promoted or given a pay rise.

The only thing that you can do is phone them the day your income changes and ask for a recalculation. This will then mean all future payments will be correct (although they can be massively reduced) my partner went from £72.00 per week to £5.00 per week. Just to make it balance out over the remaining year.

The ironic thing is they have to get the money back as its the publics money and they cannot be seen to be frittering it (/points and sniggers at NHS IT project). Public sector is just screwed up in this way and rarely takes the majority of the public into consideration and instead focus on the minority groups who have lobbyists.

Ultimately the best you will get is a negotiated settlement over an agreed period of time. They have overpaid by far too much (billions if memory serves) to let any body off.

Oh and expect it to be repeated year on year until they introduce monthly earning matches which would solve the problem entirely.

 

[0gami]

So we're goosed really?

 

[Bar]

pretty much.

I know how HMRC and DWP operate (although I don't work for either).

Its the usual public sector issue of all the information being known across the different groups but none of it is shared because

1) it would make far too much sense
2) it would make things efficient
3) they are afriad people would prosecute for breach of the data protection act. I kid you not on this point, it is a very real fear and something that is nigh on impossible to get them to budge on. Blame yuor paraoid anoraks for putting us in this position.

 

[0gami]

Just seems really unfair to me because we didnt get more than we deserved and they knew about our earnings, its as if we have totally done nothing wrong but yet are getting hit for being honest.

I guess all I can do is follow my local MP's advice and write for a reconsideration and get him to chase it up.

 

[Bar]

Yup - at the end of the day even if you lose all it will cost you extra is a couple of stamps.

You have gone down the best route by getting your MP involved.

Maybe write to him to ask why a system which is fatally flawed and could be fairly easily resolved has still not been fixed. And should you as a customer be penalised as a result.

Surely private sector companies would be penalised by the FSA and OFT for doing something similar.

 

[0gami]

Its sickening tbh and I hope that by following my MP's advice we can get this issue sorted out.

 

[VeNT]

to be honest, its THEIR mistake, you shouldn't have to pay ANYTHING back.

 

[Bar]

to be honest, its THEIR mistake, you shouldn't have to pay ANYTHING back.

all very true but when has that actually mattered a damn?

Oh slight point to Ogami - did you / your partner notify them of an increase in household income?

 

[nin9abadga]

good luck with it i hope you manage to sort it out. i think it's pretty encouraging to see your MP get involved, surprising actually.

nin9a

 

[0gami]

Yeah as soon as I moved in we did a new claim which is why the guy on the end of the phone said it was pointless to send in the end of year form as our salarys were on this new claim form.