Overpaid Tax Credits

[puddicat]

Got a letter from the tax credits saying that i was overpaid by just over �2000 , i am gutted as this must have been not only for this year but previous year also.Knew that i was overpaid this year and would have to pay, i thouught maybe �500 back, have others had dealings with them, they are threatening me with court action and costs, i have just paid off debts off due to working all gods hours, but next next year they are taking on more staff and there wont be the overtime i had got,how will they recover the money how much would they take off me a month my contracted hours are only 30hrs a week, i dont dispute some of it,and i know i cant fight a government agency any help would be appreciated!

[themas]

If you are still getting tax credits the recovery is dealt with by deduction from them. If you are not, then they ask for the money back straight away or over 12 months. However, if you can provide an income & expenditure statement showing you cannot afford to pay over 12 months and make an offer to pay over a longer period, then they should accept it (providing your figures are reasonable and you are not living an expensive lifestyle - & it appears from your post that you are not).

They can be difficult to deal with - if there is a CAB near you it could be worth consulting them for help. They can also advise you on whether you do actually owe all the overpayment you are being asked for.

This can be a complex subject and the Tax Credit Office is certainly not infallible, so don't adopt the attitude that you can't fight them. You certainly should not accept the amount of the overpayment without being given a proper breakdown of how the figure has been calculated, so ask for this.

If you haven't already got it, ask for their code of practice COP26 which gives information about overpayments and the circumstances in which they are considered to be recoverable. Then see how the reason for your overpayment relates to the information in the booklet.