An overpayment - what to do?

[snusnu]

Ok, here's my story. Do not know what to do and will I have to return everything, or should I fight...

we (me, my wife and daughter) moved back from abroad in August 2012 as I've got the contract in UK. I left (alone) in 2003, so it's been a long time for me.

anyway, I got a quite good contract, with yearly salary stated in the contract. My salary is stable, and haven't changed since.
My wife, at the moment was looking for a job (registered in the JC) and we applied for TC. We also applied for CB as our daughter was 4 years old.

We applied Joint Application in late November 2012 and we got a letter stating that we are entitled for TC.
In April 2013 my wife finally got her job and we, of course, immediately rung to HMRC to inform about that.
In June 2013 we received the renewal form, and we have filled that with our data from 2012/2013 using my and my wifes P60 ( she had a on-off 5 days free-lancing contract in January 2013, and I used P60 for only 8 months from that year). It happens that since my contract is a yearly one, my P60 stated the income I had in 2012/13 - which was ~66% of my yearly salary). Notably, I cannot enter my upcoming year salary/income data in any of the forms.

Now, since we have filled the renewal with actual and 100% correct data for year 2012/13, we received the letter, stating that we are entitled for considerably more as TC.

We were surprised a bit, but well - it has to be truth.

Now, in February 2014 we received the letter from HRMC stating, that our case was under investigation (as they say - they took us randomly) and after that investigation, it appears that our annual income in 2013/14 is going to be almost twice as we reported.

Well, that is correct, as in 2013/14 I got all the salary (for full year) and my wife started to work. But we have informed the HRMC about my wife's salary and they got my actual (correct) income for past years from P60, so generally - they have got all the correct info!
To be fair - we did not tell them what my income will be in 2013/14, as my salary hasn't changed since 2012/13...

So of course, we asked HRMC to stop the payments immediately. Later we got the letter stating that most probably we were overpaid by ~3000 pounds and the exact situation will be clear after the renewal papers we be sent back later in the year...


Now, since the amount is quite big, I wonder - what to do. Of course we do not have £3000 in savings, and this would be really difficult. Will I be able to pay that on monthly basis?
Or should I fight, as I believe, it's their mistake, as they have got all the data from year 2012/13, as well as we informed about the change of circumstances as my wife has got the job.
So - any thoughst?

[Shirley Temple]

Re: An overpayment - what to do?

I'm in a similar almost identical situation, my husband and I returned from living abroad in April 2013, I got a zero hour contract job and was told I will get roughly 18 hrs a week and my husband got a full time job, now with me only working 18 hrs I thought I would give them a call, to which I was asked what was your income for 2012/2013 I told the person £0 as I was not in the country and was told to answer the questions with £0 for that years income, we was awarded TC and thought nothing more of it,
Then the same as yourself we was sent a letter in Jan saying we were being looked at randomly, we then got another letter saying that we had been over paid by £3400 ish and they would collect it from future payments,
Effectively we will not be claiming TC again as it's only us, so they will not get this money back that way and I have not written to them to ask how we should pay it as I don't believe it's our fault if it was awarded wrong as like yourself we gave them all the correct info for the previous year,

I have not heard anything more from them but if I do I will fight it as I believe it is their fault not mine,

keep us updated please.

[enaid]

Re: An overpayment - what to do?

You can dispute the overpayment here is info and a form to fill in

https://www.gov.uk/tax-credits-overp...ute-form-tc846

[des8]

Re: An overpayment - what to do?

These problems are caused by the Tax office nor properly explaining the tax system.
Income tax is due at the end of the financial year, when income and credits are balanced out.
The use of PAYE and forward payment of credits (calculated on previous year's income whether that was two or twelve months) often creates this difficulty for individuals.

If you think you may hit these problems because the previous years figures bear no relationship to the current year,then advise the tax office in writing (no phones) immediately.
This is not made clear on their forms.
If they then don't act on the revised figures you have a chance of avoiding repayment of any overpayments as it is their fault (been there and got the Tee shirt for my daughter)

Good luck with your appeals.

If you get no joy from Taxman, but still feel aggrieved it can sometimes help to get MP involved.

If you lose and don't/can't repay in a lump sum they will recover overpaid amounts by amending your tax code