Demand For Overpaid Tax Credits

[OlafJensen]

Friend of mine received a letter this morning from Tax Credits asking for £1800. This goes back from 6 years ago. They have threatened her with debt bailiffs if she does not cough up.

Legally where does she stand with this? As in the first place she did not know the money was owed.

[Andyorch]

If the over payment is legit...then ask them to accept a payment plan...they usually do at an affordable rate.

 

Regards

 

Andy

[antone]

Debt to HMRC can be statute barred just like any other debt, but there's one important difference: even if it is SB, it can still be reclaimed from future benefit payments, including the State Retirement Pension.

 

So, as Andyorch said, the first thing to do is determine whether or not she does actually owe the money. If she thinks the decision is wrong she can appeal it - she has 30 days from the date of the letter informing her of the overpayment to do this. Collection should be put on hold until the matter is resolved.

 

If she agrees that the debt is legit, the wisest thing to do would be to sort out a repayment plan with HMRC. I wouldn't advise taking the SB approach because, unlike other debts, this one is likely to come back to bite her in future years.

[OlafJensen]

So this a debt for life! Who does the appeal go to, to them laugh? or a independent body?

[blondebubbles]

Debt to HMRC can be statute barred just like any other debt, but there's one important difference: even if it is SB, it can still be reclaimed from future benefit payments, including the State Retirement Pension.

 

So, as Andyorch said, the first thing to do is determine whether or not she does actually owe the money. If she thinks the decision is wrong she can appeal it - she has 30 days from the date of the letter informing her of the overpayment to do this. Collection should be put on hold until the matter is resolved.

 

If she agrees that the debt is legit, the wisest thing to do would be to sort out a repayment plan with HMRC. I wouldn't advise taking the SB approach because, unlike other debts, this one is likely to come back to bite her in future years.

 

It depends on the reason for the overpayment as to whether or not an appeal is appropriate. In some cases it should be a dispute.

 

It is also likely that this is not the first letter that has been sent (although the person may say they have not received a letter, HMRC can provide copies to show they were issued) as a final awards notice should have been sent when the relevant year ended. If so it is unlikely that HMRC will accept an appeal or a dispute.

 

I also agree that a repayment plan is the best option as they can take from future benefits, via tax code etc

[antone]

So this a debt for life! Who does the appeal go to, to them laugh? or a independent body?

 

Noting blondebubbles corrections and additional information, if an appeal is appropriate it would ultimately by heard by the Tribunals Service, part of the Ministry of Justice.

[OlafJensen]

OK thanks all for your reply,s and the effort and time you put into this great site. I also recommend donations.

[OlafJensen]

OK here we go.

 

I got a letter from tax credits asking me to pay £1800 overpayment. This so called debt has arisen from approx 8 years ago.

I sent a return letter asking them for an break down of the bill i.e. dates and amount paid. I just got a letter back saying they sent me this information 7 years ago!!

Where do I stand with this? It has been that long I,m sure they will not have a true breakdown of this debt.

By law must they produce a new detailed bill? I do not ever remember receiving the first one.

And also, they would have to show me a signed contract to me agreeing to the original payments?

Is there a time limit to collect a debt?

Is there an organisation that can advise about this (not CAB)?

 

 

Regards Olaf

[blondebubbles]

You can make a subject access request to see the original claim you made which would have been signed.

 

The don't do bills but you can request copies of all awards sent to you in the past. This would show the circumstances they held for you and payments made at that time.

 

Each year you claim tax credits you are required to renew by phone or in writing, you can get records of this depending on the method you chose.

 

The tax credit helpline should be able to tell you the reason for the overpayment over the phone. They can also see payments made and awards sent.

 

After 6 years you cannot be taken to court over the debt but they can recover the overpayment through other means eg your tax code, future benefits etc.

[OlafJensen]

Thanks for that. I,ll send off for that.