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jules1213
Rank; Hector Tax Inspector
8 Posts |
 Posted - 21/10/2009 : 23:19:03
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Hi all
Newbie here :o)
HMRC are claiming we have been overpaid over £1600 from the date my working hours changed from 35 to 28 - depsite being a joint claim where our combined hours remained above 30 per week.
I have submitted an appeal - and a decision should be made by 5th Nov - after over 3 months since submission.
Tax year after period of maternity leave I returned to work on the original contractual hours of 35 per week. After a couple of months my hours were changed to 28 per week.
My partner continued to work 40 hours per week.
The tax credit calc was based on previous years income - as this would not increase by more than £25,000.
Reduction in hours would result in less pay anyway - not something that you are req'd to notify HMRC about within 1 month.
However, the HMRC guidance states that the HMRC must be notified within 1 month of the following changes:
Working hours
You must tell us if you:
Are working at least 16 hours a week and your hours drop below 16 or reduce to nil.
Are working 30 hours or more a week and your hours drop below 30 or reduce to nil. For couples with children, it is your joint working hours that count towards the 30 hours.
Have been on strike for more than 10 days.
It was decided that because I did not inform them that my hours of work changed from 35 to 28, that an overpayment has resulted.
This is despite the fact that the change of hours did not materially affect the amount of the award because we are a joint claim and we remained eligible for the 30 hour element. So the "overpayment" is based on a technicality rather than us actually recieving more money that we were entitled to as a result of the change of circs.
Further, I interpreted the guidance to mean that we only have a responsiblity to inform HMRC within one month if our joint hours were reduced to below 30 hours per week ( or of course if one of us worked less than 16 hours per week).
Views and other exeprience of similar situations appreciated.
Jules
Jules
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missfroy2
Rank; Captain Gordon
236 Posts |
Posted - 22/10/2009 : 09:04:22
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Hi
You can't have a technical overpayment due to a failure to report a change of circumstances. You either have an overpayment or you don't.
For example, if you delay in reporting a change which affects your award, you will be overpaid because HMRC will have paid you tax credits (or at least certain elements) longer than you were entitled to them.
If the change did not change your award in any way, there can be no overpayment. If it is a change that has to be reported within one month, the worst that can happen is a £300 fixed penalty. These are very rare and you would have received a separate penalty notice. I am 99% sure this hasn't happened here.
Therefore there are two explanations:
1. HMRC incorrectly removed the 30hr element from your award, and therefore think that the change did affect your award. This can be correct on appeal.
2. There is an overpayment, but it is for another reason.
I would suggest you check the award notice you received that first showed the overpayment - does it have the 30hr element on it? Also, probably a good idea to ensure that for some reason your award didn't go on to a current year estimated income rather than previous year.
MF2 |
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jules1213
Rank; Hector Tax Inspector
8 Posts |
Posted - 22/10/2009 : 10:59:25
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missfroy2
Thank you for your reply.
That is very useful information.
I never thought to see if the 30 hour element had been removed. I will check that whe I get home!
I know that the hours of work for my partner remain the same on all award notices (40 hours) - so assumed that the 30 hour element was still included in the calculation. However, reading the posts in this forum - anything could be possible!
I don't believe that there was a change to estimated current year income as my income would not have estimated lower than the previous year.
The HMRC have confirmed over the phone that the reason for the overpayment was due to me not informing them of the reduction in hours from 35 to 28 within 1 month.
I hope you are right and they have just incorrectly taken away the 30 hour element.
It is certainly helpful to hear your view that if the change in circs did not affect the amount of the award - which it 'did' not (or should that be 'should'!) that there should be no overpayment.
My other issue is that I do not believe I was under a duty to inform them of that change of circs - as a the guidance states:
"Are working 30 hours or more a week and your hours drop below 30 or reduce to nil. For couples with children, it is your joint working hours that count towards the 30 hours."
So I would certainly challenge any penalty - although I doubt they will attempt to fine me.
I have had come across some many probelms in dealing with this issue.
I have rec'd some good service from staff and some terrible! One guy hung up on me! They are apparently using that call in their next customer training - on how not to answer a call!
They have failed to acknowledge two complaints - until the complaints manager got back to me after I complained about being hung up on!
I have received 3 ammended tax credit award since my appeal - stating that the reason they are writing to me is because "Your recent appeal has been upheld" despite no decision about my appeal ever having been made yet! 
Even if I win this appeal - I will be taking my complaints further and raising the issues with my MP - Nick Palmer (who is pretty good - not an ostrich!).
Thank again for your comments. This website is very helpful to say the least!
Jules |
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missfroy2
Rank; Captain Gordon
236 Posts |
Posted - 22/10/2009 : 11:13:56
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I would be very surprised if you received a penalty, although I do think technically it is the change in individual hours, the part you posted can be interpreted as you have said.
For the 30hr element, you want to check the latter part of the award where it shows how WTC has been calculated - it should list out each element with the number of days it has been awarded next to it. That would have changed if the 30hr element changed.
If that hasn't changed, the overpayment is from something else.
You might want to try contacting someone like TaxAid, LITRG, CAB for some help if you can't identify the cause. |
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jules1213
Rank; Hector Tax Inspector
8 Posts |
Posted - 22/10/2009 : 12:59:30
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Missy - thank you.
I just want to cry now! 
I have just rang HMRC and they have said that the 30 hour element was never removed throughout the whole claim - which is as it should be. I will of course double check on our award notices when I get home. But it does not bode well.
I can't think of any other reason for the overpayment - the overpayment starts on the date my hours of work changed.
It must be that I had duty to inform the HMRC that my personal hours changed to below 30 - even though this had no affect on the amount of tax credit we were entitled to, and I failed to 'read' the guidance correctly.
BUT why would the guidance mention that "For couples with children, it is your joint working hours that count towards the 30 hours", if the HMRC require all individuals to report when their hours are reduced to below 30. Surely, there would be no point in mentioning that - and just leave the guidance at "Are working 30 hours or more a week and your hours drop below 30 or reduce to nil." At the very least it is confusing and if I am in the wrong, VERY misleading.
It's quite embaressing - I am a Welfare Adviser of almost 10 years - CAB trained. So I can found my way round the legislation etc, the only thing I can't do is perhaps looked at the problem in an unbiased way! (And obvioulsy understand the HMRC guidance!!!!) Which is the main reason for posting my query - as well as seeking a second opinion and to see if anyone else has faced this problem as well. If it needs to go to tribunal I will seek specialist advise and representation from someone with more experience of benefit tribunals though! I would not feel comfortable representing myself!
However, I now inform them of EVERYTHING! Even stuff I am pretty sure I do not need to. The things is we could have claimed Childcare Vouchers - we would not have benefited as much financially but if the overpayment is correct we have actually lost out financially because of not taking up the childcare vouchers. If I knew this was going to happen - even if we win the appeal - I would have chosen to use the childcare voucher scheme. (BTW they were informed of changes in hours of childcare which gradually increased (from 2, 3 to 4 days over a period of 3-4 months) and did not decrease.
The overpayment is purely made up of the childcare element of working tax credits (the only part of working tax credit we were eligible to receive) - we continued to be entitled to child tax credit for the period of the alleged overpayment - this has not been included in the overpayment.
Jules |
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missfroy2
Rank; Captain Gordon
236 Posts |
Posted - 22/10/2009 : 15:42:13
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It isn't possible for the overpayment to be caused just because you were late reporting the change of hours of itself. That just isn't possible.
Overpayments only happen when you receive more than you are entitled to. Therefore, there has to be something wrong somewhere else.
Take your award notices from the year in question. Start with the first one and make a little table of the main details. This might help you see what is different.
If there isn't anything in the elements then it is either income related, or an error behind the scenes.
You mention the childcare element - it could possibly be related to changes of hours with that. However, if you reported them all on time then you would need to look at that.
In terms of being better off on childcare vouchers - you might not have been. Childcare vouchers impact on child tax credit sometimes, even if you technically aren't receiving any of the 'WTC' childcare element because of how tapering works.
Don't get distressed about it, the award notices are incredibly complicated.
Try contacting TaxAid or LITRG as they are specialists in tax credits and will be able to pin point the cause of it.
If your entitlement calculation is wrong it will need an appeal and your time limit for that will be ticking - if the overpayment is actually correct then you will need to find out the reason and determine whether it was HMRC error. If it was then you will need to use the dispute process.
However, be assured if the 30hr element is included and your hours stayed above 16 it is not due to your delay in reporting your change in hours. |
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jules1213
Rank; Hector Tax Inspector
8 Posts |
Posted - 22/10/2009 : 20:28:05
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Missy - thanls for your response.
I have already made an appeal - decision due 5th Nov.
I have dug out the "final tax credit decision" where the overpayment has arisen.
Working Tax Credit elements (not inc childcare) consists of Basic, Second Adult and the 30 hour element for the whole tax year. Although income too high to receive this part of the award.
Childcare element of WTC
From 25/08/08 to 30/08/08
25/08/08 - date started claiming WTC inc Childcare element (Daughter in childcare 3 days 1st week and then 4 days from following week - they were informed of this - and weekly childcare costs were £120 - the hours and fees did not change again)
30/08/08 - date my hours at work changed to 28 per week
From 16/03/09 to 05/04/09
16/03/09 - Informed HMRC around 16/06/09 about hours being incorrect on renewal form - and informed them that they changed to 28 on 30/08/08
05/04/09 - End of tax year - at this point our income would be considered too high to claim WTC - changed to vouchers.
So, the WTC elements and the Childcare element dates do not match. Main WTC elements show whole year period, and Childcare element only between those dates. Surely, the chilcare element cannot be separated from the rest of the WTC elements in this way. If my claim is stopped due to not informing them of change of circs surely that effect at least the whole part of WTC, not just the childcare element?
Secondly, the childcare element has been backdated to 16/03/09 - 3 months from the date I informed them that my hours had changed. That does not make sense - it would mean that a change of circs that I was req'd to inform them about within a month - could be backdated 3 months! So really, in effect I had 3 months to inform them of this change of circs!
I am not sure of any change of circs which are req'd within 3 months.
Thanks I will look into TAx aid and LITRG
Thanks again
Jules
Jules |
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jules1213
Rank; Hector Tax Inspector
8 Posts |
Posted - 22/10/2009 : 20:37:43
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Maybe they have input that I stopped working on the 30/08/08? Then when I informed them of my new hours around 16/06/09, they backdated it for 3 months? But I did not stop working and never said anything like that!
But that would make sense in the way the chilcare element only has been removed - if they thought only my partner was working more than 16 hours a week?
It would be so much easier if they just told you the reason why you were overpaid instead of having to be a detective!
Jules |
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jules1213
Rank; Hector Tax Inspector
8 Posts |
Posted - 23/10/2009 : 10:32:51
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More investigation using CPAG Book.
Due to my failure to inform HMRC of my change in working hours from 35 to 28 per week within 1 month, even though it was joint claim and our joint hours remained above 30 per week:
(Are working 30 hours or more a week and your hours drop below 30 or reduce to nil. For couples with children, it is your joint working hours that count towards the 30 hours.)
The HMRC appear to have ended a relevant period on the date my hours changed (30/08/08) and restarted a new relevant period (backdated 3 months from the date I informed them of the change of working hours) on 16/03/09.
CPAG states:
A 'relevant period' is:
For child tax credit (CTC) a period of an award during which your maximum amount remains the same;
For Working Tax Credit, a period during which the elements making up your maximum amount of tax credit (apart from childcare) remain the same and:
during which there is no change in the childcare you us;
your average weekly childcare does not change by £10 or more, or reduce to nil.
This is a change that must be notified to the HMRC within 1 month -if any of these changes do occur it means that either entitlement to tax credits has ceased or that a new relevant period is started from the date the change is treated as taking effect. (the second one appears to be what has happended to me - at least in part!)
It does not explain how the new relevant period has only applied to the childcare element of tax credits and not the other elements of WTC. Or the fact that the change in working hours did not change the 'maximum amount of tax credit'. The system seems to be contradictory here.
I can only assume that I am right in my assertion that I was NOT req'd to inform them of the change in my hours from 35 to 28 but it not actually affect the maximum amount of tax credit.
:o)
I wonder if anyone else has experienced this problem??????
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missfroy2
Rank; Captain Gordon
236 Posts |
Posted - 23/10/2009 : 10:54:43
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It is quite possible for people to have different periods awarded for the elements of WTC and Childcare.
Take for example a situation where a couple are both working with childcare. If one of them stop working, they may well continue to qualify for the basic, 30hr elements of WTC but they will no longer qualify for childcare costs (because you both need to normally be working at least 16hrs per week). Their award notice could look like the one you posted.
It looks from the award notice (presuming that is your final award notice for the year) that for some reason HMRC have ended your childcare between the 30th August and 16th March. If you informed them of your hours on 16th June - the 3 months would be 'backdating' (you have 3 months to tell them of a change which INCREASES your award).
So the presumption is that for some reason, HMRC believe you were not eligible for childcare between those dates.
I agree that it is possible that they think you weren't working those 16 hours and that when you told them about th e28, they think that you went back to work in June working 28 (which is of course wrong).
You should be able to speak to the helpline (or if you are CAB you might be able to use the intermediaries helpline) and ask them what hours they have recorded for you from 30th August and ask why the childcare element is not included for that period.
All of this presumes you were indeed paying childcare costs to a registered and approved provider.
Also - you need to carefully check your assertion that you will be better off on vouchers. Just because your income is too high to get WTC and WTC childcare does not mean you are better off with vouchers. Including childcare costs in an award can alter CTC. This is often something that people get wrong. Also, presumably, if the award was corrected there would be no overpayment?
MF2
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jules1213
Rank; Hector Tax Inspector
8 Posts |
Posted - 13/11/2009 : 10:00:59
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Recieved outcome of appeal and I was successful. They agreed that I did not have a duty to inform them of my change of hours from 35 to 28, as our joint hours remained above 30 - so the amount of our award was not affected.
I am very angry at what they have put me through, the 3 previouls letters stating that my appeal was upheld, the time it has taken to get my case dealt with, the alck of information provided by HMRC and the adviser who hung up on me! So, I will be complaining to my MP about these issues and seeking compensation.
Good luck to everyone lese who visits this site and I hope to come back and provide support in the near future - after I have moved house next week hopefully!
Don't know if the article about Tax Credits: ‘technical overpayments’ and ‘offsetting’ is of use to members can can be found at http://www.cpag.org.uk/
Jules |
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missfroy2
Rank; Captain Gordon
236 Posts |
Posted - 13/11/2009 : 16:30:55
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Well done on winning the Appeal, although I am still confused.
I still maintain that there can be no overpayment linked to this issue, because you never lost entitlement to the 30hr element. I think the hours issue is a red herring.
I would suggest that you check your next award notice to make sure the overpayment has actually disappeared.
Well done anyway!
MF2
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"technical" overpayment?
