Tax Credits Appeal Tribunal Advice

[littlemonstersmum]

In brief outline my husband was on a low wage that meant he wasn't working 16 hours a week in the eyes of the tax credits office. They have therefore taken away our entitlement to the childcare element of tax credit that they have been paying for the last year.


This means we are now liable to re-pay around £13k in childcare tax credits that they claim we were not entitled to.



An 'earlier years update' has been completed by my husband's employer and his salary for the relevant tax year now shows him to have worked 16 hours a week. This however has not been accepted by the tax credits office and they are basically saying we 'retrospectively amended income details purely to meet with the tax credit requirements'. It was the tax credits office that alerted us to the error in his wages and made us get the earlier year update completed but they will not accept this information.



We no longer have the requirement for such a large childcare element claim but obviously would like to avoid paying back the £13k if at all possible.

We will be completing an SSCS5A form to appeal the decision but were hoping for some advice on filling it in in order to get the best chance of a positive outcome.

Any advice would be gratefully appreciated.

Thank you.

[seduraed]

Re: Tax Credits Appeal Tribunal Advice

Ring up the tax credit office and ask them why they think his employer is lying to them ?

[des8]

Re: Tax Credits Appeal Tribunal Advice

Regardless of what to say on the appeal form, do make sure you send it off in good time.
Your appeal MUST be WITH HMRC within one month of the date on the Mandatory Reconsideration Notice.

Regarding the reasons for appeal, the best advice is to keep it simple and elect to attend the hearing. You will then get the chance to explain in more detail to the tribunal.

If you could paste up the MRN & your appeal as you intend to send it (removing identifying details) we can look it over for you.

[littlemonstersmum]

Re: Tax Credits Appeal Tribunal Advice

I think I have attached the MRN.

I was planning to say something along the lines of the following text in the appeal form:

Mr x was paid a low wage due to financial difficulties for his employer. He has worked 16 hours a week since April 2013 and a formal process approved by HMRC has been completed in order to reflect this information following trouble with his tax credits claim. An 'earlier years update' was completed by his employer as soon as we became aware that there was a problem with the tax credits claim. A copy of this updated has been submitted to the tax credit office as the information has not yet mapped onto the tax credits system. Due to the fact that the increase in wages had no effect on Mr x's tax and national insurance liability he has been informed by the employer helpline (in a recorded telephone call at 4.25pm on 12th August) that the change in salary is unlikely to map onto the tax credit system used to view this information. A letter has been written by Mr x's employer to the tax credit office confirming that he has worked 16 hours and it was due to an error that these were not reflected on his wage slips. This has now been rectified and the tax credit office should therefore accept the information as being correct and re-instate the childcare element of our claim.

It is very difficult to put into words as it is quite complicated to explain. Basically he did work 16 hours but was only paid for 8 and his wage slips reflected that. Following the problems with the tax credits his employer completed an earlier year update (as his P60 had been issued) to change the salary information and show correctly that he has in fact worked 16 hours a week. He will get paid for the extra 8 hours a week as soon as the company has the spare money (very soon hopefully!). Since the start of this tax year he has worked and been paid for 16 hours a week. The company is owned by his brother which is why he worked the hours without being paid for a while.

I don't know how much information to go into on the form. Put simply, irrespective of the reason for the error, the tax credits office should accept the change in salary but it doesn't seem as simple as that.

All advice will be gratefully received.

[des8]

Re: Tax Credits Appeal Tribunal Advice

Sorry, but I have found your appeal unclear and I fear that the tribunal will also find it difficult to follow.
You must make it clear.
I think you are trying to say that for 2013/2014 you claimed tax credits. To be eligible for childcare tax credits you both need to work 16 hours a week.
Your husband worked 16 hours per week, but was only paid for 8 hours a week. His payslips only showed 8 hours pw worked.
He accepted this situation as the employer (is it a Company?) was his brother who had/has financial problems, (but the intention was he would receive his missing pay in due course).
He is now working and being paid for 16 hours per week.
HMRC believe that your husband in fact only worked 8 hours per week, because that is what they calculate from the figures on the P60
They do not believe the explanation given by his employer that the situation caused confusion in completing the forms, and do not accept the "earlier year update" which now shows your husband as working and being paid for 16 hours pw (although he has actually only received pay for 8 hours pw and will receive the balance at some unspecified time in the future).
HMRC maintain incorrectly that his employer "retrospectively amended income details purely to meet with tax credit requirements"

You should also state how long this arrangement lasted, showing start and end dates.

Do you have any other indications or support to show you are truthful?
I don't doubt you, but you will have to convince the tribunal that you are not cheats, and that will possibly come down to how you impress at the hearing.

[Debt Camel]

Re: Tax Credits Appeal Tribunal Advice

I too fear that you are going to find it an uphill struggle to convince the tribunal. An employer's financial difficulties are not an acceptable reason to pay below the minimum wage, which is what you husband must have been receiving. The fact that his employer was his brother means the tribunal is likely to suspect that your husband wasn't working 16 hours.

What evidence can he produce to show what hours he worked? Is there anyone else at the company, preferably a non-relative, who could make a statement? Was there any form of signing in/out book that could be produced?

[littlemonstersmum]

Re: Tax Credits Appeal Tribunal Advice

Thanks for the advice. Des8 your understanding is correct. I fear we have been stupid and now look like liars.

Advice I got from elsewhere suggested that the 'earlier year update' should be accepted regardless of the reason behind it but maybe this is not the case.

It would take us years to pay back the over-payment but if we lose at the tribunal that is what we will have to do.

I will make the argument as strong as possible but I suspect it will be fruitless. :-(

[des8]

Re: Tax Credits Appeal Tribunal Advice

Well good luck with the appeal.
I don't know if HMRC have to accept corrections without question.
As Debt Camel suggests obtain as much supporting evidence as you can.
Make sure witness statements comply with prescribed form.
If you haven't already seen it, you might find this useful. http://www.cpag.org.uk/sites/default...cs005a-eng.pdf
It might be worth looking at the advice given in section 4 in particular, but most of all don't miss the time limit.