Tax credits problem?

Question

need some advice regarding tax credits. basically i tolded them the correct amount for what me and my partner earnt last year, then not long after we started recieving are new award for childcare.then a month later we recieved the same amount,plus an extra £600.then we recieved some letters to tell us that are new award was £700 a month.however are income details had changed to a lower amount then what we had earnt in 2007-2008 so now i need to phone them and ask why this has happened.however im guessing we will have to pay them back even though i had told them the correct amount from the start.so what do i do because if they start taking the money back we wont be able to afford childcare!

Answer 1

If you have given the correct info and they have messed up the calculations, you can get them to claw back the excess over the months remaining for that tax year, in this case July to March I.e 9 months.

Answer 2

If you get an overpayment letter you must seek help immedidately

You should seek professional support from you local CAB in challenge this. rules exist to stop over payments made from offical errors from being recovered.

HMRC will not collect the overpayment while they consider whether you must pay it back. When you dispute recovery of an overpayment, HMRC will check whether they have met all their responsibilities towards you and whether you have met all your responsibilities towards them. They will then make a decision about whether the overpayment should be paid back. HMRC's responsibilities include:

• accurately recording any information you gave them when you made or renewed your claim

• accurately recording any information you gave them when you reported a change of circumstance and acting on it within 30 days of you reporting the change

• accurately calculating and paying you your correct entitlement

• including accurate information on your award notice

• giving you correct advice if you contacted them.

Your responsibilities include:

• giving HMRC accurate information when you claimed tax credits

• reporting any changes of circumstance in the timescales listed on the checklist which comes with your award notice

• reporting any errors on your award notice within one month of receiving it

• checking that your payments match the amounts on the award notice and reporting any errors.

If HMRC have met all of their responsibilities but you haven't met yours, you'll normally be asked to pay back all of the overpayment.

If you have met all of your responsibilities but HMRC haven't met theirs, you won’t be asked to pay back all of the overpayment.

If both you and HMRC have failed to meet some of your responsibilities, HMRC may write off parts of an overpayment, depending on the circumstances.

HMRC should send you their decision, along with the reasons for it, in writing.

Answer 3

Can I ask why you used the money if you knew that a mistake had been made? If I end up with extra money in my account from tax credits and I do not know what it is for then I do not spend it until I have found out why I have it.

You will have to pay it back but they can sort out a repayement plan if you talk to them.

If you have not spent the over payement (which you should not have done as you knew it was wrong) then just pay it back straight away