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Originally posted by Ali M-W

Hi Steph. You have been lied to and misled,it is true, but this is most definately not the end of the line. Have you been taken to court yet, or are they simply threatening to take you? You really, really need to get some advice on this. Please go to www.taxCC.org and click on 'Contact us'. Please find the contact number for Paula Dean and ring her. Also, ring your MP as a matter of urgency, because this is a complete travesty of justice. And please print off a copy of this LITRG report. It might just come in handy.

Tax credit overpayments and the county court
(11-09-2008)


A more aggressive stance by HMRC is leading to more tax credit debt being pursued in the courts. The courts sometimes may not realise that tax credit debt should be treated differently to ordinary tax debt.

The production by HMRC of a certificate of debt is not conclusive that a tax credit debt is due and unpaid, and the tax credit claimant may be able to use that to their advantage.




In recent years HMRC have been taking increasing numbers of tax credit claimants with overpayments to court to collect the alleged debt. Evidently in some cases claimants have not been given an opportunity to challenge the recovery of the overpayment or even explain that they didn’t understand why they had been overpaid.

The statutory position with tax debt

Tax credits, although considered by most to be a benefit, follow tax rules and as such overpayments are recoverable as though they were a tax debt. But not all tax debt has the same court procedure applied to it.

We have had reports that when HMRC produce a certificate of debt in relation to a tax credit overpayment, some courts have regarded that as conclusive evidence that the debt is due and unpaid.

The courts taking this approach seem to be attempting to follow an established court procedure (CPR PD7D) where “tax” debt cases have a special status and do not follow the normal allocation route for court cases.

The different position of tax credit debt

But critically CPR PD7D does not apply to tax credit overpayments. In fact it only applies to income tax, corporation tax, capital gains tax, national insurance contributions and some interest and penalty debts.

This means that tax credit cases should be subject to the court’s normal tracking system whereby a case is allocated to a specific track based on the amount of the debt.

So what difference does it make? In broad terms a slower and more measured approach is taken if CPR PD7D does not apply. So, for example:

the court does not set a hearing date immediately upon receipt of the defence;
an allocation questionnaire needs to be completed so that the case can be allocated to the correct track;
the case is very rarely decided at the first hearing.
So where tax credit overpayment cases are defended by claimants, HMRC should reply answering all of the points raised in their defence. According to HMRC, this should be done with the aim of settling the matter either before the hearing, or – if it cannot be resolved – assisting the court by focusing on the issues in dispute.

If the case is not resolved, the case goes to a pre-trial review. The pre-trial review is for the court to review the evidence – including, but not limited to, the certificate of debt – then to decide if there is a case to answer. Frequently both sides are asked for a witness statement and evidence in support.

The importance of this for tax credit claimants is that it forces HMRC to review the case once again and crucially to produce papers supporting how the overpayment arose. In many cases it has been shown that HMRC have not fully investigated the causes of overpayments that have arisen. A more detailed review has subsequently disclosed HMRC errors thus enabling the debt to be written off.

It is not entirely clear as yet just how far the courts will go in examining HMRC’s papers and whether they will consider the test under COP 26. Whilst we would still caution against letting an overpayment claim reach the county court, the clarification of the status of tax credit debt cases means that claimants have an opportunity to challenge aspects of HMRC’s case that they believe are wrong.

Contact Name: Robin Williamson (Tel: 020 7235 9381, Fax: 020 7838 9958)

http://www.litrg.org.uk/news/latest.cfm?id=585


How do you feel about talking to the National Press? So much injustice is going down with Tax Credits, and the Conservatives are making ready for government because Brown is so incompetent - so now is a great time for kicking back against this horribly oppressive regime which masquerades as as Socialist government. There's a growing feeling that we have all taken all the s#it that honest people can take, and enough is enough.

Whatever you do, please don't even entertain the idea of paying a penny back unless you are utterly convinced this has been your fault. If we give in to bullies, they only bully and oppress us more. There is nothing they can do to besmirch your name or credit that cannot, I believe, be undone with pressure in the right places. We cannot live under Brown and HMRC's jackboot any longer. Please seek ways to avoid this recovery action rather than cowtow to it. MPs can help. LITRG can help. CAB can help. We can help here. Those who meekly pay up whilst lying awake all night wondering how they will be able to make ends meet are destined to suffer and lose, whilst those prepared to fight back always, always in my experience win in the end - and come out as stronger people from the experience. They key is getting allies on your side. I hope and pray you have an Opposition MP rather than a Nu Labour lackey, because they will look after you. Do write to Jane Kennedy and to Gordon Brown. As long as you do not let in any HMRC officials or bailiffs to your home, there is nothing that they can do to harm you whilst you are in legitimate dispute. Have you any legal cover? Are you in a trade union? You are going to win this. And you are going to survive to dance and whoop aloud and have a street party on the day Brown leaves number ten - with the rest of us!

It may comfort you to know that a victim who lost their court case still hasn't offered up a penny after two years. That a woman dragged to court repeatedly, ending losing and being fined is having her case looked at again and has found further evidence of HMRC errors, cover-ups and barefaced lies that we expect will lead to a full write-off. That a man who very nearly gave up has had his overpayment suddely wiped out.

As Gabrielle sings, 'Don't give up, don't give in, Don't you know that you must play to win?'

Others will be along soon to spur you on and give advice. You didn't hand your lunch and money to the school bully, did you? Then please don't to HMRC!



Morpheus: They are the gatekeepers, they are guarding all the doors and holding all the keys.

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