Nice example from Alan here of what can be done with a few emails.
I have cut most names out bar Alan's MP:
Here's the latest from my MP Dave Anderson.
Hope it's useful to us.
---------- Forwarded message ----------
Date: 15 September 2010 13:54
Subject: FW: Library response: HMRC errors
Please see below the response to your original e-mail. As always, your comments are welcome.
Caseworker for Dave Anderson MP
Sent: 15 September 2010 13:43
To: .....Subject: Library response: HMRC errors
To .... office of Dave Anderson MP (our ref.2010/9/67-bts)
The short answer is no.
Recent press stories about HMRC writing off amounts of £300 or less refer to the amounts individuals may owe following the PAYE ‘reconciliation process’ – not to any and all tax debts, including tax credit debts.
In brief, the department is currently implementing a new computer system, which is looking at the amounts of tax paid through the PAYE system over the last two years. About 4.3 million taxpayers will receive refunds, while 1.4 million taxpayers, having had too little tax deducted from their earnings, will be sent tax demands.
The background to this process was set out by the Exchequer Secretary in a statement to the House on 8 September – and it was on this occasion that the Minister said (emphasis added):
The Exchequer is owed a total of approximately £2 billion. The fact that we were left with the worst deficit in peacetime history means that we simply cannot afford to write off all the underpayments. To ensure that the tax system is fair for everyone and that everyone pays their fair share, we are taking action to recoup the funds as painlessly as possible. In cases of genuine hardship, HMRC will allow payments to be spread across a period of three years. As was already the case, it will not pursue cases when the amount owed is less than £300-that is an increase from the previous threshold of £50-which applies to 40% of all underpayments. Of course, in specific circumstances, HMRC will consider writing off underpayments where it can be shown that HMRC was provided with all the information necessary-although I have to tell the House, from historical experience, that that is unlikely to apply to many cases. We do not want to build up people's hopes unrealistically.
The whole statement is here: You must be logged in to see this link.
In the case of tax credit debts, the department has a Code of Practice on determining whether it will seek to recover an overpayment (COP26, July 2010) – so that in cases where the taxpayer fulfilled all their responsibilities, but the department did not, HMRC may not seek to recover this money. In cases where this does not apply, it may either recover the money by reducing future credit payments, or recover it directly – in a lump sum, or by making a ‘time to pay’ agreement with the individual concerned. It may remit tax credit debts where the cost of collection exceeds the value of the debt. This procedure is explained in the NAO’s recent report on the department’s 2009/10 should you be interested (section 4 of the report looks at tax credits – see in particular paragraphs 4.24 and 4.29 – the report is available here: You must be logged in to see this link.). Coincidentally the report also discusses the PAYE reconciliation process in more detail – see pp R6-R8 of the report summary.
I hope this material is helpful in replying to the constituent’s query.
All the very best,
...Taxation policy specialist
House of Commons Library
Sent: 15 September 2010 11:33
Subject: FW: HMRC errors
Are you able to provide me with an answer to the e-mail below?
Caseworker for Dave Anderson MP
To: ANDERSON, Dave
Subject: HMRC errors
In the Daily Mail newspaper today we read: "Victory over the taxman: Reprieve for millions told they had underpaid as Treasury wipes out bills of £300 or less"
Read more: You must be logged in to see this link.
My question is; Does this include Tax Credit overpayments?
Keep up the good work - I can see that you're being very busy!!
And here's the quotes to which the Librarian refers:
4.24 The Department recovers tax credits overpayments in two ways. If the overpayment relates to an ongoing award, recovery is made by reducing the level of payments in the following year (cross-year recovery). This adjustment is made automatically when the award for the subsequent year is calculated, subject to limits designed to protect low income families. Where claimants’ circumstances have changed, resulting in them either receiving a new award, for example because they have a new partner, or no tax credits at all, the Department passes the debt over to its Debt Management and Banking Directorate (the Directorate) for recovery (direct recovery). These recoveries are either through lump sum payments or by agreed time to pay arrangements, where the Department allows claimants to make repayments in instalments over a 12 month period. It may also allow extended time to pay or defer collection in cases of temporary financial difficulty….
4.29 The Department may remit tax credits debts where the cost of collection exceeds the value of the debt. It is also proposing to write-off and remit some debts which are difficult to enforce and which have not been actively pursued, and has recently remitted those cases processed outside the tax credits computer system which led to annual renewals not being managed in strict accordance with the Tax Credits Act 2002. Last year we reported that it initially proposed to remit £235 million of debts in the categories described. However, work to ensure that only appropriate debts were included within the categories as well as resource constraints has meant that clearance has been delayed.
You must be logged in to see this link.
So what has Alan found out for us? That they aren't going to treat tax credit errors in the same way as taxation errors. Funny that, since they haven't treated tax credits in the same way as overpaid benefits, instead choosing to apply tax law. So tax credits come under tax law - but only when it suits.
But the really useful bit is: "It is also proposing to write-off and remit some debts which are difficult to enforce and which have not been actively pursued, and has recently remitted those cases processed outside the tax credits computer system which led to annual renewals not being managed in strict accordance with the Tax Credits Act 2002." In other words, if you haven't been chased to date, quite possibly you won't be. Or if you make recovery "difficult to enforce" by not rolling over and playing dead when HMRC start their usual bullying tactics.
Right now, we at Tax Credit Casualties are looking at this whole new issue with taxation and HMRC's monumental incompetence and we will be asking our elected representatives why HMRC is allowed to get away with treating its "customers" in such a cavalier way in the 21st Century, regardless of how the past administration and the greedy bankers have left Britain in a major financial mess. Why should it be the innocent victims who pay?
I hope Alan's proactive approach to winning some tax credit justice will inspire as many members as possible to get lobbying their MPs for a safer, fairer system and an end to bullying recovery practices when HMRC has been at fault.
You may want to pick up an angle of your own - all that we ask is respect for all. You might want to quiz your MP about the way people with disabilities are treated in the tax credit system - for instance, the bizarre way HMRC seems to alternate between recognising/not recognising a disability and then requiring the claimant to prove prior entitlement and retrospectively change its qualifying rules. You may have been trapped by failure to properly apply the disregard, or repeated HMRC errors, or what we have called the "Maternity Leave Trap". There's also a mismatch in HMRC rhetoric and the reality when it comes to how they treat claimants with mental health issues ( = very badly). If you want help with your angle - feel free to ask!
Together we can get answers and finally pin our MPs down.
Morpheus: I'm trying to free your mind, Neo. But I can only show you the door. You're the one that has to walk through it.