UK tax - reclaiming & subsequent tax credits bill

[sophiedb]

how do...

Hubby and I both received money back from HMRC about a month ago, after reclaiming tax. Yesterday we also got a bill - roughly equivalent to our combined rebates - for overpaid tax credits.

I haven't had a chance to compare all the bits of paper to check amounts etc, but I'm presuming that the tax credits have become overpaid simply because we reclaimed tax and therefore can't have credits on an amount that no longer exists (if that makes any sense at all).

One more reason to detest the irritating, frustration and time consuming tax credits system... Why can't they just sort everything out in one go?!?!

Thankfully the rebate money is still sat in our UK bank account, so if we have to pay it back at least I don't have to faff about with forex..

[Duncan74]

That is muppetry of the first order, and what I thought the new IT system put in lst year was supposed to stop.

Still got to submit my reclaim. Had the form in my bag for the last month, but jsut need to finish it off. Thankfully in my case then it's pretty straightforward and obvious what I should get back. My only confusion is over the bank interest part, although with rates as they are it's not going to go anywhere neat my personal allowance anyway.

[Nikki_d72]

Query it! They sent us a huge bill for overpayment that was due to them still paying us once we'd left the country, even though they had been told that we were leaving in good time - they even sent a cheque to us at our NZ address and tried to claim they were not aware we had left the country!! It was right after the end of the financial year and arrived with no letter of explanantion, so we wrongly assumed it was due to us and used it. I have only yesterday got a long-awaited letter off of them to tell us that they are sorry for the delay in replying (my claim form and accompanying rant posted last August) and they have decided that they didn't fulfil their responsibilites so we don't have to pay it back.

They are the biggest muppets I've evr had to deal with in my life, and they are still sending us demands for NI for the period after we left, again to this address. Unbeleivable. Oh and they send you letters to a different country and the only contact numbers included for them are 0845 numbers. If you search long and hard on their website you will eventually find the relevant numbers to call the department from overseas - sorry I would include the link but I'd have to search again and will surely lose the will to live....

Best of luck, nearly 10 months later and I'm still having to deal with them.

[sophiedb]

GAH!

Well, soon I'll have my nice big desk with files of all kinds unpacked so I can send a nice big polite-angry query back. At the very least it'll be a complaint about their stupid systems. I would rather not have to pay 900 SQUIDS back to UKgov though. Kind of like the idea of having that in a holiday kitty for a trip home one day.

[sophiedb]

Quick update - and I'd forgotten about the initial letter! Must have gotten buried in quake brain..

Anyway, we recently received two more letters from HMRC. Neither were very nice.

1. Tax credits - still claiming that we had been overpaid. This letter arrived early Nov, after total radio silence since the January letter mentioned above. I rang up to find out what it was all about, and it turns out that HMRC continued to pay us tax credits until the end of 2010, despite being informed that we were emigrating on 10/11/10. The appropriate dispute form has now been sent, on the grounds that they had all the info so why didn't THEY act on it?

2. Income tax - this one was fun too. In spite of hubby receiving a ~600quid tax refund, mid-Nov brought a letter stating that this had not only been in error but that he owed a further ~650quid. Lovely. Thankfully the answer seemed obvious, and HMRC agreed. Some #$@!?# had removed hubby's personal allowance from the calcs.. lo and behold, everything is now ok. Still v irritated by their mistake giving us a near-heart attack though.

The moral of the story? Even when you lodge all your tax info in a correct and timely manner, someone can fudge it up.

Here's hoping the tax credits thing is waived anyway. I know they paid extra by error, but after the shock of those two letters I fancy keeping it as compensation!

[James 1077]

Can't remember the section but there is a section in the UK tax code that basically says that if HMRC has all the right information about you but undercharges you then you aren't liable to pay it back.

When they had the big "scare everyone with a letter saying that you owed them money" thing a year or so ago I drafted up a few claims under this section for my friends ... they all got the amounts written off.

I'll have a look later as to what section it was and whether it also works for tax credits.

[sophiedb]

Thank you

When I rang about the tax credits issue, the call centre were happy to give me the dates of when they'd logged news of our emigration from the UK and the date of departure - both of which tallied with my notes - and then also gave me the dates/amounts of the payments they'd made to us to the end of 2010 (which match our bank statements).

I put dates, details n all into the dispute form she sent me, and given that this is all in their system it shouldn't be too hard tbh. I also included the fact that I'd rung in October to advise that we were emigrating in Nov, which isn't logged as a contact at HMRC. That time I was told I was "too early" and would have to call back closer to the time. The call centre told me this was incorrect, but I know it happened even if that was incorrect advice. Ticked all the "HMRC made a mistake" type boxes, now just waiting a reply..

We were probably entitled to part of the Nov payment anyway, but the amount hadn't reduced from the usual monthly deposit. Dec was exactly the same, well over the 30 days in which they are supposed to apply changes. Fingers crossed for a positive result!

[James 1077]

It was ESC A19:
http://www.hmrc.gov.uk/esc/esc.htm

Unfortunately looks like it only applies to Income Tax and CGT - so probably not relevant for Tax Credits ... sorry!

[sophiedb]

Update here: http://www.enz.org/forum/showthread.php?t=37575

They still want ~£500...