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Mugglesworth
Rank; Hector Tax Inspector
2 Posts |
 Posted - 15/10/2009 : 15:45:11
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Hello
After being made redundant at the end of April 2007, I claimed CTC for our two children. I eventually found work at the end of January 2008 and two weeks later I informed the Tax Credit Helpdesk of this change. The operator took down my PAYE reference and asked me about my income - I replied that my "estimate for 2007/08 was £x" (i.e. three months' income). The operator recorded £x as being my ANNUAL salary - I can prove this as I have a CD of the conversation along with the operator's notes I obtained under FoI rules. £x was used as the basis of payments for 2008/09 and, lo and behold, I was overpaid by £6,000. The fact that the Helpdesk was insistent on obtaining my PAYE reference (they would not record the change of circumstances until I gave them this) led me to believe that they had access to all my income details including benefits - it is, after all, all part of HMRC. The assessments I received all stated 2007/08 income and this was correct. At no stage was I aware that the TCO was paying me based on 2008/09 income being the same as for 2007/08 - this error could only have come about by the mis-recording of three months' income as equating to an annual income.
After exhausting the self-investigation process of the Tax Credit Office where it was careful to avoid mention of its glaring error and restated that I had a duty to inform them of a change in circumstances (which I had done) I lodged a complaint with the Adjudicator's Office. The AO told me that I could expect a response by October 2008 - a year later and I've heard nothing. I am making payments of £25 per month to avoid more aggressive collection measures.
Does this resonate with anyone out there?
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samthe
Rank; Private Primate
187 Posts |
Posted - 15/10/2009 : 20:34:23
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The system works on the basis that whatever you reported as your income for a tax year (whether it relates to a whole year's work or only part of a year) is used as the basis for paying you in the next tax year, but the payment is then reviewed and amended if necessary after the end of that tax year (i.e. when you do your annual declaration) so that it ends up by being paid on the income for the later tax year. BUT:
1. If you notify them during a tax year that you expect your income to be higher than in the previous year they amend the payments at that stage; &
2. They allow an increase of £25,000 in income from one tax year to the next without it reducing your payments.
So, if your 07-08 income was (for example) £10,000 and your 08-09 income £35,000 the amount they paid you would have been correct. For you to have an overpayment of £6,000 your 08-09 income must have been far more than £25,000 above the 07-08 one. If this was not the case, then either the overpayment figure is wrong or there must be some other reason for it.
You should have received with your award notices information asking you to let them know if your income was increasing. |
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Mugglesworth
Rank; Hector Tax Inspector
2 Posts |
Posted - 19/10/2009 : 17:48:29
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Many thanks for this samthe. You are correct in that my 2008/09 income for 12 months was far more than £25,000 in excess of my 2007/08 income for three months' employment. I also received the information about informing them if my income increased by more than £25,000. The issue I have with this is that I did inform them of my change in income in February 2008 and there was no increase after that date - I simply continued in the same employment at the same salary. I did not challenge the assessments as the 2007/08 income shown was correct and I had provided all the information asked of me when I contacted the Helpdesk to inform them of my new employment.
The root of the problem lies with the Helpdesk recording my 2007/08 income as being my annual salary from my new employment - if they had recorded my actual salary, the overpayment should not have happened. I still can't understand how I could have spotted the Helpdesk error from the information that was sent to me. |
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samthe
Rank; Private Primate
187 Posts |
Posted - 20/10/2009 : 20:29:32
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The way the system works, there was no Helpdesk error. The £x was your 07-08 income - albeit for only 3 months.
Look at it another way. You got award notices saying your 07-08 income was £x and indicating your award for 08-09 was based on this. They did not say this was only 3 months income. Your 4 weekly payments in 08-09 will not have reduced below those you received in 07-08. They would argue that as you knew your income for 08-09 would be £x + y (with y being a very substantial sum) you should have realised that the award would be reduced.
Also, as I said before, you should have had information with the award notices asking you to let them know about income increases. Again, they will argue that as you had award notices showing 07-08 income of £x you should have notified them that it would increase to £x + y (or given an estimate on these lines).
I am surprised it has taken the Adjudicator so long to make a decision. The latest info. I saw was they were taking about 11 months. |
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Honesty is no excuse
