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TaxPhobic
Rank; Hector Tax Inspector


2 Posts

Posted - 21/04/2010 :  00:13:52  Show Profile Send TaxPhobic a Private Message
Dear all

I'm completely new here, only found this site ten minutes ago and consequently haven't had time to read through much, for which I apologise. But thank you for the site - it looks amazing so far.

I'm one of those people who has always been phobic about forms. Tax forms especially. I first got into trouble with tax credits when they were introduced and my then-accountant started a claim for me and my then-husband, who I was actually in the process of divorcing. The tax credits people took about the next four years to understand what my ex and I kept telling them: we were no longer a couple. During that period I was repeatedly billed for a 550 overpayment for something I had never personally received (i.e. tax credits - my ex may have received some, but I never did). Eventually after yet another phone call in 2007, they dropped it and wrote off the 'overpayment'.

Thinking the slate was clean, and because I am on a very low income, I applied for tax credits in 2008. I now really wish I hadn't. This is the embarrassing bit. I didn't keep them up-to-date about changes in jobs. I was working very hard on short-term contracts that I never knew would continue for the next week/month, I'm a single mum and consequently never have 'spare time' to sit and read mail/write letters, and I am terrified of any envelopes through the door from the Inland Revenue. So - that's all my fault. It got to autumn 2009 and they cut off my tax credits because they hadn't received any forms back from me (which they had sent) with confirmation/updates of my details.

I wouldn't have a problem with them cutting me off because I'm rubbish and didn't fill out their forms. What I have a problem with is that they want me to pay back 2,500 which they say was overpaid. However, I was always earning at roughly the same rate. My basic circumstances hadn't changed - just my employers would vary, depending on where I'd got a contract. So in my mind I never felt there was much to update them on because I felt safe that I wasn't taking anything I didn't merit. So how can they say I was 'overpaid', if I now do provide them with the right info about who I was working for, when, and for what salary?

I also don't understand the difference between making an appeal and a dispute. Would someone be kind enough to explain it to me? I'm sure you have a lot of idiots such as myself who are totally clueless, so I'm sorry. I really am terrified about this. I rang them in Sept last year and asked for a dispute form, which I now have, but I've done nothing about it since then, because whenever I think about it I want to throw up. I'm in debt in other areas, I still earn a pittance, and I don't know how I can possibly pay back this money, which I feel I should have been getting anyway.

Help?!

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kernowchick08
Rank; Hector Tax Inspector



United Kingdom
31 Posts

Posted - 21/04/2010 :  08:53:32  Show Profile Send kernowchick08 a Private Message
Hi TaxPhobic

Firstly, remain calm! I don't know enough to advise you on your next steps but there are others on here that will be along soon to offer you help and guidence. This site is a life saver for many of us. I am in the process of a dispute and if it wasn't for the support of the members on here, particularly 'Splashin', I would have have given up and given in at the very early stages!
So, for the time being, draw breath and step back - don't panic - but beleive me I know that's easier said than done especially when you're a single parent and trying to juggle everything.
Whatever way you are eventually advised to go - this site is here to help you. Remember you are anonymous here - be open and honest and the 'experts' will do what they can to guide you through the process.
Hang in there - you are not alone!
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splashin
Rank; Really should become a politician



Belize
730 Posts

Posted - 21/04/2010 :  10:50:35  Show Profile Send splashin a Private Message
Hi TaxPhobic

Welcome to our forum. The difference between Appeal and Dispute.
When you make an appeal to Tax Credits, what you are asking them to do, is to review the entitlement you have been awarded for. For example, if you had 3 children living with you but only 2 showed on your award, then this is APPEAL .
A dispute, is when Tax Credits, have paid you XXX amount and when the end of year declaration is completed or a change in your circumstances occur, it then may cause the claim to be overpaid. If you feel the overpayment was not your fault and not your responsibility to repay, then you DISPUTE .
With regards to your own overpayment. None completion of your end of year declaration, cancels out all eligibility for the previous tax years payments. Which means you have to pay it all back. Even if you hadn't told them about all your different employers during the year, but you had completed this declaration then there would be no problem. You can always try to Dispute, as I believe if you don't ask, you don't get. But I don't hold high hopes for you to be successful.
With regards to low income at present and not being in any position to repay. Do you have eligibility to claim any tax credits? If you do then the extra income coming in from a new claim may help you?

Any Questions Please Ask



Splashin
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missfroy2
Mod



298 Posts

Posted - 21/04/2010 :  14:49:45  Show Profile Send missfroy2 a Private Message
It sounds to me like the second overpayment (on your 2008) claim is probably down to 'non-renewal'. If you don't return your forms by the deadline (31 July) your payments are stopped.

What most people don't understand (because HMRC don't explain it very well) is that when you claim, you only claim for one tax year. So you made a claim for the 2008-2009 tax year. There is no claim for the 2009-2010 tax year (which starts for 6th April 2009).

The forms they sent to you in the summer of 2009 would have done two things, they would have finalised your 2008-2009 award to make sure you received the right amount. They also would have acted as a claim for 2009-2010. Without completing them, there is no valid claim for 2009-2010.

Now, in order not to disrupt payments, HMRC pay provisional payments from April which only turn into normal tax credit payments once the claim form (renewals papers) are sent back. Even though you don't send the forms back until 31st July, the law allows HMRC to treat your claim as being made from April.

Of course, as a claimant there is no way you would know that there is anything different about the payments you receive from April of each tax year until HMRC have your completed renewal forms, but it is important because they are only provisional.

So what it sounds like HMRC are asking you for is all of the provisional payments made between April 09 and whenever they stopped the payments. This is because you did not make a claim for tax credits for that period. Without a claim, there is no entitlement, therefore the money has been overpaid.

You should get some advice on this from CAB or similar. If you contacted HMRC fairly quickly after they stopped your payments, they should have done the declaration with you over the phone and treated you as making a claim (you need to do this within 30 days). Outside of that, unless you have a very good reason for missing the deadline, you have to make a new claim and deal with the overpayment.

MF2
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samthe
Mod



341 Posts

Posted - 21/04/2010 :  21:39:59  Show Profile Send samthe a Private Message
As usual, Missfroy has explained very clearly what the situation is. Your own post makes it clear you have problems dealing with forms etc., but that you are on a low income. If so, you really should try to overcome your problems or get help with the forms from CAB or a similar Welfare Benefits unit if there is one locally, because you will be entitled to tax credits and should make a new claim. But do remember if you do that it is vital not to ignore any documents sent to you - you must check each of them in detail & notify any errors to TCO immediately.

My view, based on your post, is that you are most unlikely to succeed with a dispute unless there is something in your circumstances which is not clear from the post. You say you have other debts as well as this one. Have you had any discussion about your debts with CAB or another free advice agency such as CCCS (avoid any fee charging outfits like the plague!)? It might be that a solution such as a Debt Relief Order could be available to you which would wipe out most or all of your debts (including the tax credit one).
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TaxPhobic
Rank; Hector Tax Inspector



2 Posts

Posted - 23/04/2010 :  07:54:38  Show Profile Send TaxPhobic a Private Message
*Thank you* all so much for taking time to reply - I really appreciate it.

I am so angry at myself for getting into this mess. I should be smarter than this. After years of doing self-assessed tax forms, where again I always leave it to the last minute but it gets worked out in the end, I had just assumed Tax Credits were the same and it could be worked out retrospectively. How wrong can you be (argh!) Since this is basically my fault for being so stupid (and leaving mail that comes in brown envelopes unopened for months) I can see how I'm unlikely to stand a chance.

I still feel like filling in the dispute form, however, if only to rant at them about a system where the people like me, who earn very little but work very hard to try to keep paying the rent and putting food on the table, are dragged ever deeper into debt by a scheme that was (surely) set up to *help*. I still can't quite comprehend how they call what's happened in my case an 'overpayment' when all they have to do is look at what I did earn in that tax year and see how pathetically little it was. I don't feel I got anything I didn't deserve because my income was always roughly the same. And Missfroy - thank you for that explanation. So they paid me something I hadn't requested and now they want it back. I wish they'd never given it to me. I can't understand how this whole scheme can be designed this way. Do they think we all just have buckets of money stashed away from which we can settle up all these 'overpayments', most of which seem to arise through no-one's real fault? I've seen posts now on this forum from people being told to pay back tens of thousands of pounds. It makes me so angry.

Sorry to rant, I know you must have heard it all before. I'm in the process of getting an accountant to look through my last two years worth of earnings. I was always self-assessed and then for no reason I can understand the Inland Revenue told me not to self-assess any more, but I don't think they've been calculating things right since then because my income has come from too many sources to keep up with. So I'm trying to finally face up to getting that sorted out, and then perhaps I can send in my dispute form.

I know that claiming Tax Credits again would be sensible because I would merit getting them, but I am now just too frightened of the whole system. It's an irony to me again that this system is supposed to help people on the edge of poverty. I just feel so scammed by the whole thing. I've tried so hard not to end up being a single mum on benefits, and I just feel like I can't make ends meet any more and then this, to boot - just makes me want to cry.
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missfroy2
Mod



298 Posts

Posted - 23/04/2010 :  08:13:14  Show Profile Send missfroy2 a Private Message
There may still be things you can do.

How quickly did you contact HMRC when your payments stopped? If you did it within 30 days of getting your notice saying your tax credits had stopped, you should have had your claim reinstated. Outside of this 30 days, you need to have good cause as to why you didn't renew and normally HMRC want to see things such as serious illness to be considered good cause.

That said, don't give up. Get advice, you can go to Citizens Advice or another agency to get some help and maybe they can help you.

Tax credits can be worth a lot of money and I certainly would think twice about not claiming, especially if you need them to supplement your income. Although it is a difficult system it does work ok for a lot of people (although it goes wrong for some as well). If you are worried about the forms etc you can take them along to CAB or another advice agency each year and they will help you complete them. There is plenty of free advice and help out there.

MF2
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samthe
Mod



341 Posts

Posted - 23/04/2010 :  17:23:58  Show Profile Send samthe a Private Message
I wouldn't want to discourage you from disputing, but do feel - as I said before - it is not very likely to succeed. You say your accountant is checking your income, but that won't help with the "overpayment" issue. They have already finalised the account for 08-09 on the basis of the information they had, & decided (because you didn't return the renewal form by the deadline) that you don't have any entitlement to the money they paid you for the first part of that year. Altering the income figures is not going to affect the outcome unless there is an extremely good reason why the wrong ones were given before. However, if you do claim again you must have correct income figures, as otherwise you could be overpaid or underpaid.

I do agree with you that what has happened to you is not an overpayment in any sensible meaning of the word. It is just that TCO use that word - inappropriately in my opinion - for any situation where they think money should be repaid to them.

If you do end up having to pay anything back do not accept any demand to pay it in full immediately. Negotiate a payment arrangement based on what you can afford. They will accept payment over up to 3 years with some investigation of your finances, & possibly over a longer period.
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