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39 Posts

Posted - 17/08/2007 :  11:46:47  Show Profile Send n/a a Private Message
Here's the official response from Tracy Gale at HMRC, as previously posted by Ali. I've (hopefully!) made it into a new topic to make it easier to find because we really want your comments on this.

Ali is collating our response now, so feel free to post messages here, or PM me or Ali with any thoughts of your own which you'd like included!

Does the rhetoric match the reality...you decide!



Dear Alison,

Thank you for your recent e-mails from the Tax Credit Casualties. I am sorry that I have been unable to respond fully until now. I hope the following details address your outstanding queries.

How wide a discretion does HMRC have?

Our right to apply discretion as to the recovery of tax credit overpayments is outlined in the Tax Credits Act. As discussed at our meeting, exercise of HMRC’s discretion can mean:

1) Fully, or partially, writing off overpayments under the policies set out in our Code of Practice 26 – That is, not seeking to recover overpayments that were caused by our mistake and where the claimant could reasonably have believed that their payments were right.
2) Fully, or partially, writing off overpayments where it would cause claimants financial hardship to repay them.

In the material we sent to you in advance of the meeting we explained that staff are given guidance as to when they should advise an overpayment be written off under CoP26. This guidance is based on the principles of CoP26 in that, we will not seek to recover a tax credit overpayment where it was caused by an error by us and the claimant could reasonably have believed that their payments were right.

This guidance is available in the public domain on our website at You must be logged in to see this link.

Any decision to write off all tax credit overpayments, in the manner of an amnesty as your group suggests, would not be a decision for us to make under our discretion but for Ministers who must consider both the effect on all tax credit claimants – including those who have already agreed to repay their overpayments – and on the general taxpayer.

Lesbian, Gay, Bisexual, Transsexual/Transgender (LGBT) Training

As discussed at our meeting, the Department takes diversity and equality– of all forms, not just LGBT – and the attitudes of our staff very seriously. We expect all our staff to act with the utmost professionalism at all time and to put the experiences of customers first.

More information about our policies can be found in the Diversity and Equality area of our website at You must be logged in to see this link.

Status of backlog for complaints, appeals and disputes

It is very hard to give a figure for what you are asking since the levels of stock on hand change constantly. However, we maintain very strong targets for responding to claimant complaints, disputes and appeals and the department aims to respond to all forms of correspondence as soon as possible. I do not recognise a picture of backlogs in these areas. However, as I am sure you will understand, depending on the exact circumstances of a case it can take us less or more time than average to prepare a full response.

Lost call records

We consider each dispute against recovery of an overpayment on a case by case basis. On the rare occasions that a call record cannot be accessed this will be taken into account when determining whether the claimant could reasonably have believed they were receiving the correct amount.

Customer service

We are always aiming to improve our customer service and we will always aim to ensure that all the correct details are included in any correspondence. Unfortunately, there will always be cases of human error and if this causes any distress to customers the department will apologise. I hope that we answered any concerns you had about the handling of your particular award at our meeting.

Reasonable belief test – Literacy, numeracy and language difficulties

Our Tax Credit Office has always considered possible literacy, numeracy or language difficulties of the claimant as part of the reasonable belief test.

However, we also expect claimants, if they do not understand any of the information we send them, to ask for help, either by asking someone to act on their behalf as an appointee or advisor or by contacting us through the Tax Credit Helpline.

Subject Access Requests (SAR)

I am sorry if you feel that following SAR requests you have not received all the information that you believe is held. If you, or any of your colleagues, feel that information is missing then you should contact the Tax Credit Office.

Accountability to the public
As with all government bodies we are accountable to the public through their representatives in parliament. This will include scrutiny by bodies such as the Treasury Select or Public Accounts Committees.
If there is a citizen who has suffered loss as a consequence of administrative action and does not have any legal cause of action they may pursue a complaint through the Parliamentary Ombudsman (following a referral by a Member of Parliament) or, in the case of the Department, the Adjudicator’s Office, if he or she is not satisfied with the department’s offer of an ex gratia compensatory payment
More information, including published reports, can be obtained from these bodies’ websites, the addresses of which are listed below:
Revenue Adjudicator - You must be logged in to see this link.
Parliamentary Ombudsman - You must be logged in to see this link.
National Audit Office - You must be logged in to see this link.
Treasury Select Committee - You must be logged in to see this link.
Public Accounts Committee - You must be logged in to see this link.

Objectivity of disputes
All disputes against recovery of a tax credit overpayment are considered on a case by case basis so that we can take into account the individual claimant’s circumstances. Claimants can complain if they disagree with the decision or matters are not resolved to their satisfaction. Ultimately our handling of their case can reviewed by the Adjudicator or through the Parliamentary Ombudsman.

Legal proceedings
As I explained in the material we prepared at your request prior to the meeting, we will only instigate legal proceedings to enforce recovery of an overpayment as a last resort. Before any court action is taken we make numerous attempts to contact the claimant, including at least one personal visit, in order to discuss the situation and make arrangements to pay.
At any point during this process the claimant may dispute the recovery of their overpayment, appeal against any entitlement or penalty decision on their tax credit award or, if they have exhausted our complaints procedure, ask the Adjudicator or, through their MP, the Parliamentary Ombudsman to investigate their case.
You ask for assurance that premature court action is no longer taken and I can assure you that premature court action was never taken and so continues not to be taken. Where court action has been initiated it is because the claimant has made no contact with us or refused to repay an overpayment.

Putting ourselves in the shoes of the claimant
We investigate every dispute on a case by case basis and the guidance I mentioned above helps aid staff to place themselves in the shoes of the claimant, they are advised to consider what the claimant can and cannot have understood as well as any exceptional circumstances that may have affected that individual claimant.

Court action – judgements of debt
I have not got this information to hand. I am investigating whether it is available in the format requested.. When I have an answer I will write to you directly.

Claimants understanding their awards
You have asked should claimants reasonably have known when we failed to update their information when asked or when we fail to correct a mistake when advised by claimants. It depends very much on the circumstances of the case. Clearly, if someone rings up correcting information then it is fair, initial assumption that they think their award is incorrect in some way. COP 26 currently contains a provision, that if we wrongly tell a claimant that their award is correct, even though they have questioned it, we will accept that as passing the reasonable belief test. Informed by discussion with the Adjudicator and the Ombudsman, Ministers had already informed the Treasury Select Committee that they have asked us to take steps to clarify the nature of the test and set out more clearly the responsibilities of the claimant and that we plan to consult on a revised COP 26 in due course. We will publish our proposals on our website and you will be welcome to comment then.
I should add that where a claimant’s award has been disrupted because of poor service by us then the department will apologise or may offer to make a compensatory payment.

Human Rights guidance
I believe that I forwarded the information we hold on Human Rights guidance to you before the meeting. I have asked colleagues to investigate whether they can find any further guidance and if they are able to I will send this to you directly.

Pause before overpayment recovery
Ministers have already informed the Treasury Select Committee, that we could not introduce a pause before recovery of overpayments in the short or medium term.
Since this issue was raised by the Ombudsman in 2005, we have introduced a number of measures that protect claimants from any financial hardship that could result from the recovery of a tax credit overpayment. We:
• Have restricted the rate of recovery of overpayments from on-going award to 10% of the on-going award (for those claimants in receipt of an award with no reduction due to income) and 25% (for those claimants with an award which has been reduced due to income but above the minimum award.)
• Have increased the income disregard, the level at which a household’s income may rise compared to the previous year without affecting the level of award, from £2,500 to £25,000.
• Suspend recovery of tax credit overpayments following an initial dispute, a subsequent dispute where new and relevant information has been provided, any appeal against an entitlement or penalty decision.

Freedom of Information requests
You said you were not satisfied with the way we have treated some of your requests under the Freedom of Information Act. As with all public bodies we must act within the law and so, where appropriate, must consider questions from the public under the Freedom of Information provisions to ensure they are handled correctly, fairly and consistently. Parliament has set out a statutory framework for this which includes a timetable for release of information. It recognised that there is a cost to the taxpayer in officials extracting and finding this information and that the right to access information needs to be balanced against the need of public authorities to continue to carry out their other duties and therefore has set a cost limit for each request.. We are therefore allowed to decline to comply with certain requests for information where these requests would be particularly expensive. The method of calculating the cost is set out in the fees regulations. Further information can be found at You must be logged in to see this link.

The TCC website
Thank you for passing on the link to your group’s website forum. I did take the time to read the posts about individual court experiences. I am sure you understand that it is difficult for me to comment without knowing the full details of any case however I feel I should refer to some of the information we sent out in advance of our meeting with you. This explained our processes for the use of legal proceedings to enforce recovery of tax credit overpayments as well as the fact that, once in court, both we and the claimants are under the jurisdiction of the Judge. I have included another copy of this note with my e-mail.

Flooding
One of your most recent e-mails included the TCC’s advice to us about the sympathetic treatment of tax credit claimants who have been unfortunate victims of the recent severe flooding. Treasury Ministers made a written statement to Parliament on 26 July 2007 about our approach to the flooding across all areas of its work. On Tax Credits the statement said:
“HMRC will also support those who have difficulty sending in their tax credit renewals on time or notifying HMRC of any change in circumstances. Individuals affected by the floods should contact HMRC who will take steps to ensure that tax credits continue to be paid at the right level”

Your complaints
I have noted your complaint against a member of my team and can assure you that the department takes all such matters seriously. I did recognise that the implications for tax credits of the introduction of civil partnerships is a real source of concern for your group and that our explanation of why we had to recognise the legislative status of such partnerships was one you disputed. However, I neither saw nor heard anything from anyone on my team at the meeting with TCCG which could be open to criticism. I do recognise that you do not take the same view.

Suspension of overpayments
Further to your telephone call on Wednesday, as my colleague explained we are not suspending the recovery of all tax credit overpayments.

Meeting with the Adjudicator
This would be something for you to take up with the Adjudicator’s Office and it would not be appropriate for me to influence their decision over whether the TCC should visit either way.

Further CDs
If you have requested further information from the Tax Credit Office then you should contact them if you need an update on your request as this will be the most efficient way of resolving this.

Finally, as promised at our meeting, we have looked into the handling of the direct recovery of Sarah’s tax credit overpayment. I would be very grateful if you could provide me with a contact address for Sarah so that we can write to her directly.
Yours,

Tracy Gale

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39 Posts

Posted - 17/08/2007 :  12:59:10  Show Profile Send n/a a Private Message
To get the ball rolling.....

I'm really disappointed with this response from Tracy Gale - it appears to be a mixture of rhetoric and buck passing rather than a genuine effort to address the concerns of tax credit overpayment victims.

In the meeting we tried time and time again to show HMRC that the systems weren't working and there were many problems with the way that Tax Credits were set up and run. Despite HMRC admitting in the meeting that the early information was poor and many mistakes were made, Tracy appears unwilling to recognise that problems still exist or that people are still being afftected by the early fudges.

How disappointing when such good progress could have been made.

In response to specific sections of Tracy's reply:.

1. CoP26. Is a hard enough criteria to meet in theory, but in practice it appears that the Tax Credit office staff aren't even following their own guidance. In reality, as cases on this forum suggest, even when there have been multiple HMRC errors and claimants have been told their awards are correct or made multiple efforts to get them corrected, their overpayments simply aren't being written off. It appears to be easier for the Preston office (or whoever) to simply rubber stamp "your fault - pay up" on disputes and then hope that claimants pay up or the buck gets passed to the Adjudicator.

Therefore, I would like to know if HMRC have targets for reclaiming overpayments. I would also like to know the procedures that a staff member has to go through to write off an overpayment rather than rejecting the dispute (TC846 for example). I would like Tax Credit Casualties to be granted a visit to the overpayments dispute team in Preston (or wherever) to see the process in practice and assess the training and resources given to the staff processing overpayment disputes. I would also like to know the % of overpayment disputes that are written off following submission of a TC846 - I imagine it to be very low.

2. Backlogs. I find it almost laughable that Tracy does "not recognise a picture of backlogs". We have yet to receive a response to our information request of April 2007, our TC846 sent 3rd May 2007, and our telephone call in June 2007 and letter of 16th July 2007 chasing a response and requesting a representation authorisation form. Is this blind ignorance or denial? Platitudes from an ivory tower don't go down well when you're trying to keep the wolf from the door.

Not to mention that this reply from Tracy was 2 months after our meeting.

I therefore suggest that Tax Credit Casualties escorts Tracy to Preston to find out exactly what the backlog really is.

3. Lost Call records. Thank you. I will bear Tracy's response in mind should we receive (eventually) an unsatisfactory reply to our TC846.

4. Accountability. It would be great if HMRC could get their own house in order so that people didn't have to resort to going to the Adjudicator, MPs, CAB, Ombudsman, national press etc in order to get justice. And where was the accountability to tax payers when the Tax Credit scheme was set up in such a shambolic way, and mis-sold as "money with your name on it" not a provisional payment?

If HMRC are genuinely accountable then they will LISTEN TO and ACT ON the information in the Ombudsman's report "Putting Things Right" and will listen to and act on the advice of groups like Tax Credit Casualties instead of fobbing us off as this response does. And they will listen to suggestions on how to make the tax credits system better, rather than hiding behind their rose tinted glasses and pretending everything is peachy or someone else's responsibility.

5. Legal proceedings. We presented several case studies in the meeting where legal proceedings had been taken before the dispute procedure, and gave evidence of the certificate of debt over-ruling the Judge's powers. Perhaps Tracy wasn't listening and then lost the paperwork we gave her.

In my own case, we have a letter from the Court stating the Judge as saying that the Court was not the place to appeal the amount owing! Ali - let me know if you'd like a copy of this. It was only pure luck that I found the tax credit casualites web site the day before the Court case and asked for adjournment to go through the dispute procedure. Even though we had disputed the overpayment in letters to HMRC prior to the Court hearing, the court case went ahead. Inland Rev reps at the Court were interested solely in how we were going to pay, even after we said that we were disputing that money was owed.

6. Freedom of information request. The actual question raised by Tax Credit Casualties in the meeting was for the costs involved in HMRC et al processing an overpayment dispute (e.g. the cost of issuing and responding to a TC846 form, dealing with complaints and appeals, processing SAR requests, dealing with MPs, adjudicators and Ombudsman). Basically what we wanted was an idea of how much tax payers money was spent processing overpayments disputes compared to writing them off. (If you've got an overpayment debt of £3000 but it costs tax payers £5000 to process the dispute then....). We did NOT ask for this information under the Freedom of Information Act. Instead, HMRC themselves decided that they were treating it as a Freedom of Information Request and then HMRC themselves decided that it was too costly and they therefore didn't have to comply. How convenient.

Yet this information must exist - they must know how much they spend on the Overpayments and complaints team at Preston, for example, and could calculate how many staff they have working on overpayments disputes or dealing with the Ombudsman. If you add in all the time and effort that MPs, HMRC, the Treasury put in, the costs of preparing and going to Court, and the costs of producing reports then it must add up to a fair whack and a decent percentage of the total overpayments made, if not more. It must be more cost effective to write off the overpayments rather than process the disputes or try to recover the money through Courts and other methods.

Maybe we could get some good MPs or the national press to challenge Brown and the Treasury on this, on behalf of taxpayers everywhere.

Ok well that's enough steam vented for now.

Happy weekend!





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Alan the Geordie
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3032 Posts

Posted - 17/08/2007 :  13:16:46  Show Profile Send Alan the Geordie a Private Message
Why didn't we just write that ourselves and save Tracy Windbag the trouble??
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Ali M-W
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3558 Posts

Posted - 22/08/2007 :  18:57:59  Show Profile Send Ali M-W a Private Message
Just to reiterate that we're collaborating on our response to HMRC now, to which anyone who wishes to is welcome to contribute. Any burning issues, anyone?

I have to say we weren't particularly impressed with HMRC's effort, if the above letter could be described as such.

Still, quite remarkably for HMRC, there was some attempt to answer all the questions raised, which has to be a first!
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Robert
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829 Posts

Posted - 22/08/2007 :  21:28:54  Show Profile Send Robert a Private Message
In one committe report, payments off under £300 pounds were written off, due to the cost it would take to be recovered...although in that report, they were going to get a true cost,as to how much it would be to process an appeal. so some form off brekdown, off costs must be avaiable..or are they just getting the accountants in..if so many people just pay up. versus appeals.. and work a profit or loss, out with that formula..


i will find the report, i beleive it is in the archive section..

The truth is out there.. GO get it..

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Alan the Geordie
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3032 Posts

Posted - 22/08/2007 :  21:28:58  Show Profile Send Alan the Geordie a Private Message
quote:
Originally posted by Ali M-W

Just to reiterate that we're collaborating on our response to HMRC now, to which anyone who wishes to is welcome to contribute. Any burning issues, anyone?

I have to say we weren't particularly impressed with HMRC's effort, if the above letter could be described as such.

Still, quite remarkably for HMRC, there was some attempt to answer all the questions raised, which has to be a first!



I'd like to contribute a Molotov Cocktail.
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Ali M-W
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3558 Posts

Posted - 23/08/2007 :  06:32:45  Show Profile Send Ali M-W a Private Message
At times, Alan - so would I...
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240 Posts

Posted - 23/08/2007 :  21:52:32  Show Profile Send n/a a Private Message
As them about that Jane Kennedy statement on 25/07/07 they cannot deny that one!!!!

What exactly are these admin errors involving procedures 2003-2004?

Cheers and good luck
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Ali M-W
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3558 Posts

Posted - 24/08/2007 :  14:46:24  Show Profile Send Ali M-W a Private Message
Okay folks - sorry it's long (and I lack the technological knowhow for the questions - which were in bold - to come out bold on this), but here's TCC's latest letter to HMRC:


Dear Tracy,

Thank you for your reply to some of the issues raised by the Tax Credit Casualties before, during and after our June meeting. I have consulted with my TCC colleagues and would like to respond to the various points raised and overlooked, as we are very disappointed with your response, which appears to be a mixture of rhetoric and buck passing rather than a genuine effort to address the concerns of tax credit overpayment victims.

In our meeting we tried time and time again to show you and your colleagues that the systems weren't working and there were many problems with the way that Tax Credits were set up and run. Despite your admitting in the meeting that the early information was poor and many mistakes were made, you appear unwilling to recognise that problems still exist or that people are still being affected by the early fudges. How disappointing when such good progress could have been made.

We have received no meeting minutes from you; remarkable considering that the four of us, without the benefit of secretarial support, were able to record our discussions professionally and in great detail at the same time as contributing fully to the debates. I await your own version of the meeting minutes, which I would reasonably expect to receive within two weeks, as I cannot see how you would be able to either respond fully to our many concerns or prepare your report to Jane Kennedy without having access to these. As senior officials representing a government department is it not customary, when involved in important meetings and consultations, to take comprehensive minutes and distribute them to all participants with minimal delay? I am shocked that these have not been forthcoming, as this suggests to me either a lack of respect for us as an organisation worthy of such basic consideration, or a complete disregard for thoroughness and care that does nothing to elevate HMRC’s poor reputation.

Q.1. When can we expect a copy of HMRC’s own meeting minutes for our consultation on 12th June 2007?

Thank you for explaining the scope of HMRC’s discretion, part of which involves ‘fully, or partially, writing off overpayments under the policies set out in our Code of Practice 26 – That is, not seeking to recover overpayments that were caused by our mistake and where the claimant could reasonably have believed that their payments were right’. My TCC colleague Sarah notes that ‘in a letter I have received from HMRC dated 19th July 2007 they quote “The overpayment is below the amount for which we will seek recovery”’. She asks the following questions:



Q.2 a) Why is the threshold for writing off overpayments not mentioned either in CoP26 or your response?

b) What is the threshold amount?

c) Why did HMRC start proceedings on three of Sarah’s claims only to say, when contested, that they are all below the amount and will not be recovered?

d) If there is threshold, why is this not publicised so that claimants are aware of their rights?

e) We would also like to know why has a member of TCC whose overpayment was recently written off in full has now been sent a further demand for £54?

Furthermore, CoP26 is a hard enough criteria to meet in theory, but in practice it appears that the Tax Credit office staff aren't even following their own guidance. In reality, as cases on our forum suggest, even when there have been multiple HMRC errors and claimants have been told their awards are correct or made multiple efforts to get them corrected, their overpayments simply aren't being written off. It appears to be easier for the Preston office (or whoever) to simply rubber stamp "your fault - pay up" on disputes and then hope that claimants pay up or the buck gets passed to the Adjudicator.

Therefore, we would like to know:

Q.3. a) Do HMRC have targets for reclaiming overpayments?

b) What procedures does a staff member have to go through to write off an overpayment rather than rejecting the dispute (TC846 for example)?

c) Could the Tax Credit Casualties to be granted a visit to the overpayments dispute team in Preston (or wherever) to see the process in practice and assess the training and resources given to the staff processing overpayment disputes?

d) What percentage of overpayment disputes are written off following submission of a TC846? (We imagine it to be very low.)


You go on to say that ‘any decision to write off all tax credit overpayments, in the manner of an amnesty as your group suggests, would not be a decision for us to make under our discretion but for Ministers who must consider both the effect on all tax credit claimants – including those who have already agreed to repay their overpayments – and on the general taxpayer’. We were aware of this as you stated this at the meeting, but you also said you would raise this with Dawn Primarolo.

Q.4 a) Has this been done with Dawn Primarolo or with her replacement, the Financial Secretary Jane Kennedy?

b) When will the Report (which you promised at our meeting would not be subject to lengthy delays) which Dawn Primarolo professed to so eagerly await be ready for her successor?

c) When can we expect to see it?

You note in your letter that ‘the Department takes diversity and equality … and the attitudes of our staff very seriously. We expect all our staff to act with the utmost professionalism at all time and to put the experiences of customers first’.
This is not our experience from the meeting.

Q.5. If we are not happy with your response to the discourtesy shown by a member of your staff team, to whom can we complain?

Regarding the status of the backlog for complaints, appeals and disputes, you assert that ‘we maintain very strong targets for responding to claimant complaints, disputes and appeals and the department aims to respond to all forms of correspondence as soon as possible’. Whilst we appreciate that circumstances of a case differ, and some cases take longer than others to respond to, we do consider your answer rather inadequate. In the words of one of us, ‘What a cop out! How can a backlog not be recognised?’

As Lisa says, ‘I find it almost laughable that Tracy does "not recognise a picture of backlogs". We have yet to receive a response to our information request of April 2007, our TC846 sent 3rd May 2007, and our telephone call in June 2007 and letter of 16th July 2007 chasing a response and requesting a representation authorisation form. Is this blind ignorance or denial? Platitudes from an ivory tower don't go down well when you're trying to keep the wolf from the door. Not to mention that this reply from Tracy was 2 months after our meeting. I therefore suggest that Tax Credit Casualties escorts Tracy to Preston to find out exactly what the backlog really is’.


Q.6. In the absence of any clear statement from you as to what would constitute a reasonable amount of time in which to respond to complaints and disputes, nor any indication of how long, on average, such cases are taking to handle, how is it going to be possible to:

a) identify problems, set targets for improvement, and establish whether there has been any improvement on response times?

b) measure the cost effectiveness of recovery versus write-off, when so little is understood about the duration of the process, the costs of staff time, and general workload pressures, let alone their impact on ‘customers’?

c) restore faith in the system as honest and transparent, and capable of acknowledging problems and deficits as part of its ongoing quality control?

d) establish any targets for dealing promptly, fairly and effectively with disputes and complaints?


e) And could some attempt now be made to acknowledge and assess, as Lisa suggests, the many backlogs we know exist within the system, and deal with them?

As my TCC colleague Sarah points out, ‘these are all pretty standard performance indicators for any business or organisation.


Regarding lost call records, you state, ‘on the rare occasions that a call record cannot be accessed this will be taken into account when determining whether the claimant could reasonably have believed they were receiving the correct amount’.

Q.7. Does this mean then, when lost calls are ‘taken into account’, that the ‘customer’ is considered to be right until proven otherwise? Evidence from the Low Incomes Tax Reform Group suggests that when it is the claimant’s word against HMRC’s that a call was made, or that they were told something which strengthened their belief in their award being correct, it is the claimant who loses their case. Has this now changed?

Regarding customer service and accountability, you note that ‘unfortunately, there will always be cases of human error and if this causes any distress to customers the department will apologise’. We accept that there is always human error in any given line of business, but do not feel that this is an acceptable response; it is certainly not my own experience that proper apologies are given, and my recent letter to Richard Summersgill cites many examples of countless errors with minimal apologies or attempts at proper redress, and the Adjudicator is now investigating these malpractices. This also applies to Sarah’s case, where she states, ‘there has never been an apology for the error and the error has only been recognised once and then repeatedly glossed over and specifically omitted from the explanation to my MP.’ Paula has seen countless examples in her extensive casework. I am enclosing a copy of a letter I received from the Adjudicator’s team, prior to Dame Barbara scrutinising the evidence gathered, and I am sure you will agree that the volume and severity of the ‘human error’ and resultant distress makes for illuminating reading. I wish I could say my case was the worst example of serial malpractices I have ever seen, but it is becoming increasingly apparent that if tax credits were a disease, mine is merely German Measles in comparison to many others of which we are aware. I ask you to read these enclosures and tell me how you would perceive this ‘service’ and its consequences had our situations been reversed.

I am sure you will agree that the TCO have offered a dismal service, as indeed they will continue to do until meaningful minimal standards are introduced and properly adhered to – as other services and professions have been doing for years. In ‘Why do HMRC bother with service standards?’ (20-10-2005), John Andrews from the Low Incomes Tax Reform Group writes:

‘No standards have been published since we chased last time. No-one seems to care. Perhaps it is because the standards are meaningless and not properly monitored?’
You must be logged in to see this link.

And again in ‘Treasury Committee measures HMRC's progress’ (10-08-2007), he comments:

HMRC’s own performance statistics (measured against Public Service Agreement targets) indicate that service standards have not deteriorated, but the report acknowledges that performance against these targets ‘may not translate into improved service delivery’. For example, it highlights an anomaly in the tax credit statistics which shows that although 97% of tax credit awards are processed accurately, only 40% of payments are in fact correct. A clear case of measuring the wrong figures (a subject which LITRG has raised frequently in the past…..see our article Why do HMRC bother with service standards?).
You must be logged in to see this link.

Q.8. In the absence of clear, meaningful, enforceable standards within HMRC, what is being done to limit the potential for human error? What accountability is there for staff who make these errors?

It could only be beneficial to all concerned if you at HMRC could get your own house in order so that people did not need to go to the Adjudicator, MPs, CAB, solicitors, Ombudsman, national press etc. in order to get justice. We wonder where the accountability to taxpayers was when the Tax Credit scheme was set up in such a shambolic way, and miss-sold as "money with your name on it", not as a provisional payment.

If HMRC are genuinely accountable then you will LISTEN TO and ACT ON the information in the Ombudsman's report "Putting Things Right" and will listen to and act on the advice of groups like Tax Credit Casualties instead of fobbing us off as we feel this response does. You will also listen to suggestions on how to make the tax credits system better, rather than hiding behind your rose-tinted glasses and pretending everything is peachy or someone else's responsibility.

Regarding the ‘reasonable belief test’, you state that you do take into consideration possible claimant difficulties with literacy, language or numeracy, but with the proviso that ‘we also expect claimants, if they do not understand any of the information we send them, to ask for help, either by asking someone to act on their behalf as an appointee or advisor or by contacting us through the Tax Credit Helpline’. One of our National Co-ordinators, Sarah, points out, ‘There is an additional issue which has arisen through my case – HMRC say I should have got someone to explain the award or called them if I didn’t understand. But it is only in retrospect that I know I didn’t understand – you can’t ask for help if you don’t know there is a problem. It’s an issue of not knowing what it is that you don’t know!’


Q.9. What responsibility is HMRC taking for the fact that it is only recently that, with some improvement in communication by HMRC and media cases of overpayments, claimants are starting to be aware that ignorance isn’t bliss but likely to lead to heartache and financial ruin, and that they need to be checking and re-checking the Revenue’s work? Will you finally acknowledge that we were never properly warned that overpayments were inbuilt, that the Revenue was extremely fallible, and that the accountability was vicariously transferred to us?

The subject access requests which repeatedly fail to generate all the information within reasonable timescales are, I am sorry to say, a recurrent problem. You suggest that claimants who feel information might be missing should contact the Tax Credit Office, but many of us do, and still do not receive satisfaction. In my own case, I have complained to the Adjudicator that it has taken months if not years of requesting specific documents before I received most of this; I am still awaiting a copy of my first dispute letter to HMRC which you managed to lose twice – when first sent to you, and again when the LITRG attached a copy for you which was obviously never properly recognised. Whilst contacting the TCO is a sensible recommendation, you will understand that in the absence of proper action and replies, we do need someone else to contact; to persuade you to comply with the original request, and to ensure that there is some external auditing of your rather lax performance in this, as in many other areas. Please remember that we ask for this information because of the difficult and stressful situation in which your errors have put us, and we cannot escape from the adversarial circumstance of your holding the potential key to our proving our reasonableness to you as both judge and jury, and with this being so, need recourse to more than just your fickle goodwill and compliance with our requests.

Q.10. Given overwhelming evidence the TCC have that SARN requests are commonly taking far longer than the 20 days we are told they should take, and is repeatedly failing to generate information we know to exist and which is vital to the success of our disputes, are you now prepared to make a statement about what we can expect from you in terms of response, and to whom – outside HMRC – we can complain when information is not supplied?

Regarding public accountability, you state, ‘we are accountable to the public through their representatives in parliament…[and] the Treasury Select or Public Accounts Committees’, and that any ‘citizen who has suffered loss as a consequence of administrative action and does not have any legal cause of action …may pursue a complaint through the Parliamentary Ombudsman…or…the Adjudicator’s Office, if he or she is not satisfied with the department’s offer of an ex gratia compensatory payment’. This is all well and good but there is an issue on the length of times such things take to pursue. Claimants cannot refer to the Adjudicator until they have a response to their queries from HMRC, and if they do not get the required response they cannot refer. Similarly it is not possible to go to the Ombudsman any more until the case has first been to the Adjudicator. HMRC can effectively stall indefinitely, ie. Sarah’s case from 03/04 has still not got answers from HMRC, and my (Alison’s) case has only just gone to the Adjudicator after months of uncertainty as to where in the system it was (I’m not even convinced that the TCO knew).
Q. 11. a) Are there not standards within the TCO which can be made public, together with clear information on how to complain? Often claimants are understandably so preoccupied with contesting recovery that they are unaware of their rights, any service standards, how to complain, or that simply outlining TCO injustices in any correspondence pursuing their case does not automatically invoke an official complaint.
b) What assurances can you give us that you note and act upon errors and malpractices highlighted in claimants’ letters?
c) Do you use disciplinary action, re-training and rewards and incentives for quality customer service (as opposed to quantity of work handled) to promote best practice and eradicate poor work, discriminatory attitudes, etc.?
d) What steps are you taking to compensate for the fact that those claimants experiencing the worst examples of malpractice are often the most disempowered and least able to assert themselves through complaints processes, and to be proactive in uncovering and rectifying the underlying problems (ie. dealing with implicit complaints rather than just explicit ones)?
Please try to answer d); whilst you may well argue that you see no need to look for problems, please bear in mind that not only are you the ones offering a service, but HMRC has long called upon untrained claimants to do exactly this when requiring them to second-guess whether their attempts to change details and correct errors have actually been acted upon by your department, and to take full responsibility for HMRC’s inactions! John Andrews from LITRG also recommends, ‘Records of ‘informal complaints’ should be kept and how, or whether, they are resolved so that a fuller picture can be built up of customers’ reactions’. (You must be logged in to see this link.)

You explain that ‘all disputes against recovery of a tax credit overpayment are considered on a case by case basis so that we can take into account the individual claimant’s circumstances’ and that ‘claimants can complain if they disagree with the decision or matters are not resolved to their satisfaction’. We do not feel that HMRC are responding to issues and queries raised by claimants in respect of their cases, and the obvious conclusion is that it is a policy issue to facilitate workload management, as claimants are powerless and in the absence of fast and effective complaints processes, the worst a claimant can do if they do not receive an answer to their questions is to write or call again.
Q. 12. What commitment can HMRC give regarding responding to issues and queries raised by claimants in respect of their cases? What can claimants do – apart from contacting you again - if answers are not forthcoming, or are unintelligible or not relevant?
Your assurances that ‘we will only instigate legal proceedings to enforce recovery of an overpayment as a last resort’ and that ‘where court action has been initiated it is because the claimant has made no contact with us or refused to repay an overpayment’ do not address the issue of threats of court action made to claimants during the appeals process. Evidence was provided at the meeting, including details of a specific case. We were told that both the specific case and the general principle of court letters would be looked into and responded to. This response is not satisfactory or acceptable.
As Lisa sums up, ‘We presented several case studies in the meeting where legal proceedings had been taken before the dispute procedure, and gave evidence of the certificate of debt over-ruling the Judge's powers. Perhaps Tracy wasn't listening and then lost the paperwork we gave her. In my own case, we have a letter from the Court stating the Judge as saying that the Court was not the place to appeal the amount owing! [we will gladly supply a copy of this]... It was only pure luck that I found the Tax Credit Casualties’ website the day before the Court case and asked for adjournment to go through the dispute procedure. Even though we had disputed the overpayment in letters to HMRC prior to the Court hearing, the court case went ahead. Revenue representatives at the Court were interested solely in how we were going to pay, even after we said that we were disputing that money was owed’.
Q.13. What measures are being put in place to ensure no court action is taken until such time as the claimant has been made aware of their right to dispute the recovery of any overpayment, is advised how to, and fully understands the consequences both of non-repayment and attendance at court (many still believe it is a tribunal where they can present their case and be fairly judged!)?
As regards HMRC putting themselves in the shoes of the claimant, whilst you maintain that staff ‘are advised to consider what the claimant can and cannot have understood as well as any exceptional circumstances that may have affected that individual claimant’, we see little evidence of this in practice, and feel that whatever good intentions lie behind this concept, this is not working. Staff know how the system works and have little or no comprehension of how complex the system is to claimants. One of the Casualties writes, ‘have you noticed that the people on our forum…who claim to work for Tax Credits appear to be completely clueless…recommend lying, and think they know it all…exposing how ignorant and badly trained tax credit staff are’. It is heartening that there do exist TCO employees who have enough insight into the traps of the system and empathy for us to wish to join our forum and offer advice, but it is also troubling that their ‘advice’ is often misguided if not counterproductive or dishonest. The only way TCO employees are truly going to walk in our shoes is if we establish better dialogue – and to do that, we need you to be more forthcoming about the current problems and not brush them under the carpet, as we feel your letter does.
Q.14. Differences aside, can we now expect an honest, ongoing dialogue with you? Will you support the TCC’s inclusion on the Tax Credits Consultation Group? Could an invitation be extended to our representatives to visit the Tax Credit Office in Preston and meet with key decision-makers on the office floor?
We await your response to our question regarding court action and how many claimants have successfully averted judgements of debt in the near future.
Regarding claimants’ understanding of their awards, you note that ‘COP 26 currently contains a provision, that if we wrongly tell a claimant that their award is correct, even though they have questioned it, we will accept that as passing the reasonable belief test’. Whilst this makes sense, we would argue from direct experience that this is not being put into practice, and would gladly give you examples from Sarah’s 03/04 case and many, many others (where we have permission to share). I know of a case where HMRC agreed a full write-off just before the claimant was due to have a National newspaper publish their story (which was then scrapped); up until the media’s intervention, even though the claimant was able to cite the date, time and substance of a helpline call when assurances were given by the adviser that the queried award was correct, HMRC had refused a write-off. Yes, you did accept in the end that the claimant was entirely reasonable, but only at the end of months of wholly unnecessary distress and uncertainty, and had an investigative journalist not intervened, no doubt this claimant would still be awaiting a response, despite providing you with all the information you could possibly need to establish their reasonable belief.
We welcome your announcement that ‘informed by discussion with the Adjudicator and the Ombudsman, Ministers had already informed the Treasury Select Committee that they have asked us to take steps to clarify the nature of the test and set out more clearly the responsibilities of the claimant and that we plan to consult on a revised COP 26 in due course’, details to be published on HMRC’s website. The Adjudicator’s 2007 Report acknowledges how stringent the reasonable belief test is, and LITRG and many other organizations have backed such a review.

Q. 15. You state ‘ you will be welcome to comment’ on the re-written COP26, but given that you ‘plan to consult’ on the new guidance, should we not be included in those consultations, as the only service user-led organization with unique ‘customer’ insights into how these policies impact on claimants?

We look forward to receiving further guidance relating to Human Rights, and with the Act placing the onus on services and departments to actively promote and uphold Human Rights as part of their ongoing professional development, rather than passively respond to challenges as they occur, would suggest that if you have nothing more recent to offer us, now might be a good time to revisit this. I am aware that there is currently a claimant’s lawyer challenging the legality of your actions in respect of a specific client under Human Rights legislation, and if the only reason HMRC are not currently undergoing investigation for breach of this Act is lack of the financial resources for legal action on the part of victims of the system, you will appreciate that your organisation is on very unstable ground.

Q. 16. What steps are HMRC taking to keep abreast of Human Rights legislation and avoid human rights abuses and expensive litigation?


Thank you for clarifying that despite the desirability (and legality) of applying a pause before overpayment recovery, ‘Ministers have already informed the Treasury Select Committee, that we could not introduce a pause before recovery of overpayments in the short or medium term’. We were uncertain as to this point, as Ministers seem to be saying different things at different times and in different situations.

You note that in the interim you have adopted various measures to ‘protect claimants’, including a decision to ‘suspend recovery of tax credit overpayments following an initial dispute, a subsequent dispute where new and relevant information has been provided, any appeal against an entitlement or penalty decision. Unfortunately, this is not sufficient or is not being put into practice, since many of us (including Sarah and I) have had deductions from our awards without our knowledge and whilst still disputing the overpayment.

Q.17. Why are claimants still having payments deducted from ongoing awards when they are neither aware of these deductions nor have exhausted the dispute process?

We appreciate the fact that, with Freedom of Information requests, you need (as with any organisation) to balance the ‘cost to the taxpayer in officials extracting and finding this information and…the need of public authorities to continue to carry out their other duties’ against individuals’ rights to have this information, and that you may have ‘a cost limit for each request’ and are ‘allowed to decline to comply with certain requests for information where these requests would be particularly expensive’. Although the method of calculating the cost may be set out in You must be logged in to see this link. , you fail to evidence why the request is above the threshold. If you don’t do this, you are able to use this ‘get out clause’ without true basis, and whilst this may be convenient for you, it does not promote trust and transparency.

Indeed, the actual question raised by Tax Credit Casualties in the meeting was for the costs involved in HMRC and others in processing an overpayment dispute (e.g. the cost of issuing and responding to a TC846 form, dealing with complaints and appeals, processing SAR requests, dealing with MPs, adjudicators and Ombudsman). Basically what we wanted was an idea of how much taxpayers money was spent processing overpayments disputes compared to writing them off. The reasoning behind this is that if, for example, there was an overpayment debt of £3000 but it costs taxpayers £5000 to process the dispute then clearly writing off is not only more ethical but actually more cost-effective. We did NOT ask for this information under the Freedom of Information Act. Instead, HMRC themselves decided that they were treating it as a Freedom of Information Request and then HMRC themselves decided that it was too costly and they therefore didn't have to comply. How convenient.

John Andrews from the Low Incomes Tax Reform Group writes, of the Freedom of Information Act:

This is a valuable safeguard and in our experience much valuable information can be obtained through use of it. That said, an over-zealous interpretation of the exemptions it gives can diminish its value unnecessarily…. Care should be taken that the spirit of the FOI should be followed to promote openness and freedom of information, not the exemptions in the FOI used as a pretext for secrecy.

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Your reticence to disclose suggests secrecy, for we cannot believe that this information does not exist in some form. You must know how much is spend on the Overpayments and Complaints team at Preston, for example, and if the will was there, you could calculate how many staff you have working on overpayments disputes or dealing with the Ombudsman. If you add in all the time and effort that MPs, HMRC, and the Treasury put in; the costs of preparing and going to Court; and the costs of producing reports then it must add up to a fair sum and a substantial percentage of the total overpayments made, if not more. It must be more cost-effective to write off the overpayments rather than process the disputes or try to recover the money through Courts and other methods, and if you really did have the empathy for us that it appeared that you had during our meeting, you would be facilitating our request for this information, not impeding it. If we cannot get these figures from you, no doubt it would be possible to get one of our better MPs or the national press to challenge the Treasury on this, on behalf of taxpayers everywhere, but how much more helpful and confidence-inspiring it would be if you were able to supply this yourselves.

Q.18. Without your knowing how much it costs to pursue an average tax credit dispute, nor even (it would appear) how many staff are employed on what salary to handle what quantity of disputes per week (for instance), how is it possible for you to know how cost-effective your business is, and how far you are truly protecting the public purse through the current application of CoP26 and the reasonable belief test? How can budgets be set without this information?

Thank you for taking the time to read the posts on the TCC website forum about individuals’ court experiences. The invitation is there for you to visit this site and follow all tax credit related threads, because if you are truly serious in your intention to understand claimants’ experiences, here you will find a very raw and authentic first-hand account of the suffering and misery involved.

Q.19. Accepting that you cannot comment on individual cases without knowing the full circumstances, could we set up a system with you whereby each month we could present illustrative cases (with the individual’s consent) and invite you to comment on them and, once you have agreed that they exemplify malpractice on your department’s part, extend your remedies to other cases with similar issues involved?

Regarding our request for more sympathetic treatment of tax credit claimants who have also suffered from the recent severe flooding, we were pleased with the recent written statement made by Treasury Ministers to Parliament on 26 July 2007, saying: ‘HMRC will also support those who have difficulty sending in their tax credit renewals on time or notifying HMRC of any change in circumstances. Individuals affected by the floods should contact HMRC who will take steps to ensure that tax credits continue to be paid at the right level’.

Q.20. Please can you confirm that this statement was either wholly or in part as a result of our earlier request to you?

Regarding our complaint against your colleague DW, I want to make it clear that we were not complaining about your ‘explanation of why we had to recognise the legislative status of [Civil] partnerships’, but how, when we challenged your colleague’s assertion that LGBT partners were now very fortunate to have the option of an alternative to marriage as missing the point (you will appreciate that anti-discriminatory practice goes beyond ‘treating everyone the same’ and would include a little more recognition of how the sudden application of a change in policy might affect an already discriminated against group), we were subjected to some very unpleasant sneers and facial expressions very eloquently conveying your colleagues deep disdain for us, which persisted for some time (until he left). You state, ‘I neither saw nor heard anything from anyone on my team at the meeting…which could be open to criticism. I do recognise that you do not take the same view’. I accept that it is quite likely that you did not witness the full range of your colleague’s contemptuous expressions (of which gurner Les Dawson would have been proud), due to the seating arrangements. I hope that it is indeed the case that you did not witness the face-pulling, as I would not like to think you could condone this. We feel it noteworthy that the member of staff concerned spent the bulk of the meeting angled in such a way that his facial expressions were clearly visible to TCC but not to HMRC attendees.

Q.21. Can you confirm the view that the meeting became less antagonistic after this member of staff left the meeting? Has a note of the complaint been put on his personal file in case of future issues?

I note that your office are not (as we had heard from a claimant who is pursuing litigation against HMRC) suspending the recovery of all tax credit overpayments.

I have approached the Adjudicator directly with my request for a meeting at her office, as you feel unable to assist with this request.

Thank you for looking into the handling of the direct recovery of Sarah’s tax credit overpayment (which we presume concerns the premature Sheriff’s court threats made even though she is still in dispute) and I will email Sarah’s home address and contact details to you separately.

We have other unanswered questions from our original meeting with you:

Q. 23. Regarding the ‘Maternity Leave Trap’, you said you would ‘take this away to consider’. Have you reached any conclusions yet?

Q. 24. Our meeting minutes state that you agreed to take the feedback on amnesty to Ministers, as this would be their decision not HMRC’s. You also accepted that HMRC made lots of mistakes, and lots of people suffered. When can we expect your Report to senior Ministers? And will you acknowledge in your report your department’s role in these overpayments?

Q. 25. At our meeting TCC provided examples of cases where people are not claiming tax credits, having been put off by bad experiences and the system’s poor reputation, and offered further evidence on request. Have you any comment to make on this?

Q. 26. At the meeting, you said you would look into the matter of the Certificate of Debt which, when produced in court (even when court cases are premature and the claimant had no opportunity to dispute recovery of the overpayment) seals their fate as debtors and prevents any defence. What conclusions have you reached regarding this?

Q. 27. You stated at our meeting in June that we could have a copy of the Human Intelligence report which is given to all employees that includes whistle blowing. We have not received this yet. Please could this be sent?

Q. 28. Have you any comment to make about the way the old and new disregards only apply to actual, rather than recorded, salaries? We pointed out the unfairness of a hypothetical situation where someone may have deliberately withheld (for their own gain) information that their salary increased, and benefited from the disregard, whilst another, more honest, person might be penalised for not spotting an HMRC error which still only took them within the disregard, but where the disregard was not applied. We asked, why should the honest person in this situation be penalised? Have you reached a conclusion yet?

Q. 29. When we raised the issue of the Treasury massively underestimating the likely overpayments when they introduced the tax credit system, and how all the overpayment problems occurring in Britain happened previously in Australia, you stated that you would discuss this matter with your lawyers (especially as we believe a charge of Corporate Negligence should be answered). What was the outcome of your legal discussions?

Q. 30. We also asked you the following question, to which we are still awaiting a reply: Of the 37,000 court actions brought by HMRC in the financial year to the end of January 2007, in what proportion of these has HMRC not secured a judgement of debt? How many cases were postponed, and of these, how many were subsequently abandoned? In how many cases did the judge conclude that the claimant should not repay?

Q. 31. Jane Kennedy issued a the following Ministerial statement on 25/07/07 :

The Financial Secretary to the Treasury (Jane Kennedy): HM Revenue and Customs (HMRC) has identified an administrative problem with a number of older tax credit awards. It has come to my attention that officials did not follow the correct procedure when reopening some of these cases. This now needs to be remedied.
HMRC have estimated that they need to review around 160,000 awards in total from 2003-04 and 2004-05, out of the 6 million households that are benefiting from tax credits. These are cases where information that reduced the households’ entitlement came to light after the award for that year had been finalised and closed.
HMRC will shortly be writing to these households to inform them that their case is being reviewed in order to correct this administrative error. HMRC will contact them again once they have completed their review.
Those affected will not need to take any further action themselves, and no household who has their case reviewed as a result of this issue will have their tax credit award reduced.
Although the revised award was an accurate reflection of the households’ new circumstances, the process by which HMRC took this into account was not correct. HMRC should have notified recipients in writing at the time, that it was examining the award after finalisation, but did not do so in certain cases.
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Will you now be writing off non-fraudulent overpayments arising during these years, as suggested by the LITRG?

Q. 32. With increasing emphasis on reducing the power gap between HMRC and its ‘customers’ (as repeatedly advocated by John Andrews from the LITRG), will HMRC now reinstate those parts of its online manual which can only be viewed by HMRC staff and which are withheld from the public, as a defensive measure to reduce challenges based on inconsistent and poorly defined areas of practice? How does it serve the public interest to withhold substantial parts of this manual and deny claimants knowledge of guidance which will help them pursue justice?


Finally, on the Rightsnet Forum, I found this, from Paul Stagg, Barrister, 1 Chancery Lane, dated Fri 03-Aug-07 06:28 pm., regarding Offsetting notional entitlement.

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‘... At the end of the last thread, reference was being made to the changes to the Claimant Compliance Manual. We can now see on the website the fruits of the policy changes made. The index is here:

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.... and you will see at para 15605 what, in broad terms, the new policy is:

"Where an examination or enquiry is opened on or after 17 May 2007 and it establishes there was an undisclosed partner we will consider remitting all or part of the overpayment to reflect the true loss to the Exchequer. However, this can only be considered in cases where the claimant made a genuine error when they made their claim. It cannot be considered where a claimant was late in telling us about a change in their circumstances."

So they are pulling up the ladder to try to prevent anyone running arguments based on the inconsistency between the general HMRC approach and the Compliance approach.’

Q.33. Are you saying that HMRC are happy to write off overpayments where someone didn't realise they needed to declare their new partner, and made a genuine mistake? If that's the case, should you not also write off overpayments where a claimant did declare a new partner but you failed to act on the information they gave? If you're letting off people who did the wrong thing for the right reasons, shouldn’t you also let off people who did the right thing for the right reasons but who were unlucky enough not to have their changes applied by HMRC at the right time? And how about me (Alison), who declared a same-sex partner at the appropriate time and was then ‘rewarded’ by another overpayment as my award for that whole year was recalculated? Should I not have this written off as well?

There are many questions here which need your proper consideration, and whilst we would not expect instant answers, we would like some indication of when we can expect to have your reply to each. In particular, we would expect to receive your own meeting minutes by return, together with your commitment to a date on which your Report to Jane Kennedy will be available for her and our consideration. You will appreciate that each of the Tax Credit Casualties who attended the meeting has their own story of the human costs of disputing their own case for three years or more, and we are still living with the uncertainty and powerlessness of having others who have never met us decide our fate. Pursuing these issues has involved extraordinary amounts of our time, money, effort and annual leave, and we do feel we deserve a response prompt enough and full enough to recognise this.

Whilst to illustrate the points we are raising, we have quoted specifically from those cases we are most familiar with, which tend to be our own, I am sure you understand that we are not seeking preferential treatment but trying to provide you with evidence of the key problem areas where we and innumerable other claimants have been badly let down, in order that you can put this right to the benefit of all the ‘customers’ who have entrusted you to pay them the right tax credits. As you know, we actually speak on behalf of all members of the Tax Credit Casualties, with over 300 cases having been brought to our attention for ongoing casework support; our website has had over 40,000 visits and we have been recognised by numerous established charities and welfare organisations. We speak for the wider community of tax credit claimants who have no other voice, and it is therefore imperative that you engage fully with us and remove rather than create obstacles to this collaborative process. Your honesty and good faith is essential if a poorly delivered system is to significantly improve.

As I stated earlier, we are extremely disappointed with the length of time it takes to obtain responses from you and with specific comment to the minutes of our meeting of 12th June I would wish to point out that we had a full set of agreed minutes produced and shared with you by 28th June 2007 – just over two weeks after our meeting took place.


Please bear in mind that the process to produce these involved each of us providing typed versions of our handwritten notes and these then being pulled together in a cohesive format, reviewed and then agreed by each TCC attendee, all undertaken out of office hours, in our own time. As with all our correspondence to you, including this response, we consult with members of the group via email and the forum to establish communications that have been agreed by the group and still we maintain quicker turnaround times then you manage to achieve yourselves.

We have the ideal opportunity for some positive dialogue and for HMRC to silence its critics by engaging properly with us, owning up to and clearly defining where the problems lie, and taking steps to redress the power differential between HMRC and us. I look forward to your addressing the concerns detailed, answering our questions as fully and honestly as possible, and providing both your meeting minutes and a copy of your Report to Jane Kennedy. Please do not disappoint us.


Yours sincerely,

Alison Myers-Ward,

On behalf of the Tax Credit Casualties.



cc. Paula Dean, Sarah McCall, and Lisa Weatherley, Tax Credit Casualties.

Gordon Brown, PM, 10 Downing Street, London, SW1A 2AA

Alistair Darling MP, Chancellor of the Exchequer, HM Treasury, 1 Horse Guards Road,
London, SW1A 2HQ

Jane Kennedy, Financial Secretary of the Treasury, 1st Floor, Threlfall Building,
Trueman Street, Liverpool, L3 2EX

Danny Alexander, Shadow Work and Pensions Secretary, Liberal Democrats.





















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auntieh
Rank; Really should become a politician



United Kingdom
625 Posts

Posted - 24/08/2007 :  22:04:46  Show Profile Send auntieh a Private Message
Gosh Ali you must be knackered after writing all that. Well done. Re apologies for HMRC errors. What is that. I've never received one in fact they STILL haven't old us directly that they (or their software)made an error in 2003. They've only admitted it to my MP and she is about as much use as a ...t in a paperbag as she seems to think that's good enough reason for us to repay it.....after an interval of three years silence on the part of HMRC.
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n/a
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240 Posts

Posted - 25/08/2007 :  06:06:21  Show Profile Send n/a a Private Message
Thanks Ali Sarah Paula and gang - A really excellent response covering the points we all need to raise on this forum.

Absolutely brilliant and we look forward to a response shortly.

Edited by - n/a on 25/08/2007 12:45:21
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Ali M-W
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3558 Posts

Posted - 25/08/2007 :  08:13:48  Show Profile Send Ali M-W a Private Message
Thanks for that! To quote an old Blondie song Paula's rather fond of, 'One way or another, I'm gonna find ya, I'm gonna getcha, getcha, getcha, getcha...'. HMRC can run but they can't hide.
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n/a
deleted



240 Posts

Posted - 25/08/2007 :  12:47:42  Show Profile Send n/a a Private Message
like the Blondie song!!!

When Parliament get back after the l o n g holidays (alright for some who can afford to swan off for months) - the Mirror may be ready for action.

Lilly case would be a good one
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Ali M-W
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3558 Posts

Posted - 26/08/2007 :  16:53:19  Show Profile Send Ali M-W a Private Message
I think it's a case of biding our time, staying in contact with various journalists, keeping them up-to-date with the progress of our campaign, and being ready for them when they are ready for us. Our day will come, I have no doubt of that. We all have different experiences of a system which is so bad and yet so glorified that it's become sinister. Sooner of later this subject will get proper treatment from an investigative journalist and the cracks in the system will be chasms which are plain to see, even for those, like Brown, intent on covering their eyes.

Until we get proper coverage of this, we must continue to fight our own cases, expose the injustices and inconsistences whenever the opportunity arises, and look after ourselves and each other.
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Ali M-W
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3558 Posts

Posted - 26/08/2007 :  16:56:32  Show Profile Send Ali M-W a Private Message
I'd like to think we are doing the last bit particularly well, because on that everything else depends. They will not grind us down and keep us acquiescent and quiet. We shouldn't be held responsible for the mistakes of those who are paid to serve us - it's as simple as that.
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n/a
deleted



240 Posts

Posted - 31/08/2007 :  17:38:41  Show Profile Send n/a a Private Message
Please ask them to explain just exactly what these incorrect procedures are, that have led to thousands of letters going out dated around 28/08 regarding TC Overpayment not being fully informed until after a year later, when TC just stop!!
If only they could be so ACCOUNTABLE!!!
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Ali M-W
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Posted - 09/09/2007 :  09:48:15  Show Profile Send Ali M-W a Private Message
Thanks Rosie. This has been asked, and a whole lot more, but accountability and answering legitimate questions are both HMRC's weak points, as you well know, so the answer is blowing in the wind (or Gale, as Tracy Gale is our point of contact now?)

I'm just wondering about a concerted campaign to lobby HMRC and Brown to declare a full Amnesty rather than a piecemeal approach which would see illegally-recovered overpayments reimbursed, and presumably outstanding-but-illegally-chased overpayments written off. The reason why CPAG didn't pursue a group action against HMRC demanding Amnesty was worries about opening the floodgates for those who had already paid to get money back. Since that is now happening, the objection has gone, and we could and should be pressing for a full non-fraudulent write-off.

We're now in contact with National Newspaper journalists and have a legal firm looking at a group action, so we need Legal Aid eligible tax credit casualties to urgently make themselves known.

I'm doing a presentation next Saturday of the tax credit debacle for the Opposition candidate's community day, and I know she has mooted a postcard campaign... I will raise the issue of illegal recovery next week and see what support we can tap into.
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Ali M-W
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Posted - 15/09/2007 :  08:59:56  Show Profile Send Ali M-W a Private Message
I chased Tracy Gale's office yesterday, as with our Media campaign picking up, and the Shadow Chancellor formally writing to Alistair Darling for urgent responses to the charge that HMRC broke the law with recovering some overpayments, I did not want to give HMRC any excuse to lie low at this exciting time. Here's a summary of my telephone conversation yesterday with David Skinner, which I believe accurate:


Conversation with David Skinner, HMRC Policy Advisor, Tax Credits, on 14th September (3pm).

Illegal recovery cases
Asked to clarify the implications of Jane Kennedy’s Ministerial Statement (July), David Skinner said that all those affected by the errors to which she refers have been written to. She has identified and confirmed the numbers affected. HMRC are looking to review the cases of all those sent letters. If claimants have not had a letter, then they are outside the group to which this relates.

I asked how much confidence people could have that all the affected cases were being identified, since people were coming forward to us to say that they thought they might have come into the ‘illegal recovery’ category but had not had letters. I pointed out that, as a group, claimants had already experienced so many problems that faith in the Revenue’s ability to get things right had been decimated. David Skinner said he was confident that the relevant cases had been identified.

I was told that HMRC were reviewing all these cases ‘to put them on a legal footing’, and that they were currently working out how they would do this as part of a programme of reviews. If it turned out that HMRC could not recover, they would not do so, and would refund payments recovered. How this was calculated was not explained.

Mr Skinner said that he was confident that ‘absolutely no-one would lose out’, and that this was what the Financial Secretary had said. Some overpayments would be written off, and moneys recovered paid back. He thought the majority had been dealt with using the right procedures, and repeated that ‘no-one will lose out’.

Retrospective disputes
I asked David Skinner if he could give some advice regarding claimants who had repaid tax credits or who were in the process of repaying, if they thought (regardless of whether they had received letters to say their cases would be reviewed, or if they suspected that their payments had been illegally recovered) that they had been denied the opportunity to dispute recovery before repayment commenced. I said I had often been asked, or had seen people asking on the forum, whether they could stop repaying money (where they had set up payments themselves under duress), or ask HMRC to stop reclaiming/deducting payments from any ongoing awards, and begin a retrospective dispute, without incurring any penalty. Mr Skinner said he was not aware that there was any time limit on disputes, but said there would have to be a reason why they were disputing recovery other than an unwillingness to pay. They would need to ‘believe that an official error created the overpayment and that they thought that they were paid the right amount’. If the overpayment was caused by the claimant, it could not be disputed. Should the claimant raise a dispute, recovery of the overpayment would need to stop.

Court judgements
I mentioned to David Skinner that one Tax Credit Casualty (Sammy) feels he has been denied the opportunity to finish his dispute with the TCO because HMRC supplied a court certificate and this was sufficient in itself to secure a court judgement of debt to HMRC, which he considers unjust. Mr Skinner did not have an answer to how this might be overcome, but suggested Sammy took legal advice to see if the judgement could be challenged on the grounds of the evidence not being correct. He thought that if a court makes a judgement, then no-one could not go against that, or outside the ruling. Mr Skinner stood by the stated HMRC policy that court orders are only issued if HMRC thought the money was owed and that they could recover it. He said that if the person appeals (he used the word claimants use, but which the TCO do not use in such a context normally, preferring to talk of ‘Requests to Reconsider a Recovery’), then HMRC ‘would hold off’, but otherwise a court order would be issued. The only matter of debate is whether the court has the documents to make a judgement. If a judgement of debt is made, the claimant can choose to go to a court of appeal, and appeal against that judgement. If the judgement was in a county court, they would have to go to a higher court. David Skinner did not know how to advise someone to go about that, and I pointed out that judicial reviews were prohibitively expensive, as I guessed higher court action would be, too. David Skinner said that most people, if they weren’t happy, would dispute their case before it went to court, or go to the Ombudsman. I contended that people were either not being told of their right to do this, had trouble getting their MPs to make the necessary referral to the Ombudsman (which is a postcode lottery, Labour MPs tending not to be as helpful as opposition ones), or genuinely thought the court case was a tribunal or a hearing of their case. I do not recall what Mr Skinner’s response to this was, but he seemed to take this on board.

David Skinner said that on receiving a judgment, the claimant was obliged to repay the revenue, and they had a right to recover. I asked what would happen if the claimant were to argue that the judgement was flawed, procedures not followed, and that the proper opportunities to dispute recovery had not been given. I asked if it was a matter of the claimant having to set up standing orders to repay, or whether the recovery was initiated by the Revenue sending demands for payment, for if it was the latter, couldn’t the Revenue in certain situations just let the judgement lapse and not actively recover the amounts? Could they not just stop their requests for the payment? Mr Skinner said what usually happened if claimants did not pay up after having a judgment against them was that a restraining order was applied for. He reiterated his view that court cases were a last resort. I pointed out that there were people I knew of who had been sent summonses for court who had either had no chance to dispute recovery, or who were still in the dispute process, and suggested that the Revenue were acting in an opportunistic way, trying their luck, and going for people they saw as ‘soft touches’. Mr Skinner said ‘I can hear what you’re saying’, and that he would find out what happens, although he assumed this was being done in ‘legitimate ways’.

I believe regarding recovery generally, David Skinner said that the courts were looking to see if the law was being complied with. I had expressed some dissatisfaction with the response that the Tax Credit Casualties had had from our London meeting with HMRC. I said we were still waiting for their meeting minutes and the progress of their report to Jane Kennedy. David Skinner’s response suggested that there would be no minutes and that the note-taking by JS was towards the report, but he could ‘make enquiries’ and let me know the progress of this next week.

I confirmed again with David that people already in repayment who have not had the full opportunity to dispute recovery of their overpayments ‘can dispute – technically they can’, but only if there are official errors and they believed their payments were right.

This may be what we need to at last remove the artificial differences between those Tax Credit Casualties who have already paid up, or who are paying up currently, and those of us still in dispute. It unites our campaign, because formerly there was always the issue of what happened, if we were successful in gaining an Amnesty for all non-fraudulent overpayments, to those who had already paid up and would lose out. Now we no longer have those distinctions, due to the fact that illegally recovered overpayments look set to be refunded, and people who have been coerced into setting up repayment plans without proper recourse to the dispute process, or who are having money deducted at source from ongoing payments can now – or so I am told by HMRC’s Policy Advisor – stop their repayments or ask for recovery to be stopped, and launch a retrospective dispute. I feel this is good news for all of us!

Ali Myers-Ward, 15th Sept 2007.




Morpheus : Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.

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n/a
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Posted - 15/09/2007 :  09:07:07  Show Profile Send n/a a Private Message
brilliant Ali!!
Re Court cases
I am not fully convinced that the so called "certificate of debt" is relevant to tax credit overpayments, from what I interpret, it seems to be only relevant to Income Tax... anyone else of that opinion? The link on the forum to it I checked yesterday looks open to interpretation!
You must be logged in to see this link.

Edited by - n/a on 15/09/2007 09:14:15
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Ali M-W
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Posted - 17/09/2007 :  16:23:09  Show Profile Send Ali M-W a Private Message
An update. I got the weirdest of letters, and it seems others have to. I emailed and phoned HMRC, and have now been advised (by email) that Richard Summersgill will be writing to me this week with 'substantive answers'.

How helpful it seems to be to have one popular newspaper behind us, and the BBC 'waiting in the wings'...

The Media, it seems, have a lot of influence.

The answer may still be completely useless, of course, but at least there is some semblance of an 'answer'on its way.



Morpheus : Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.

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Ali M-W
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Posted - 17/09/2007 :  16:44:32  Show Profile Send Ali M-W a Private Message
James Coney, Deputy Business Edintor, Daily Mirror, can be contacted on: 0207 293 3030, or by email at james.coney@mirror.co.uk

Giving his mobile out might be a bridge too far and he may end up hating me.

Good luck, all.

Sow the seeds, and the harvest could well be a bumper one.



Morpheus : Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.

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