Tax credits problem - what can i do?

Question

Ive just had a letter from the Inland Revenue stating that i owe them a combined total of £16789 for the past two years payments which i have received (Tax credits) because i failed to tell them about a change in circumstancies.

Now i accept that i didnt inform them about the changes however what can i do from this point forward as i cant pay that much money over 12 months.

What action are the Inland revenue likely to take if i cant pay and also will they accept repayment in installments over a much longer period?

HELP! :(

Answer 1

Whilst the situation with tax credits is ridiculous with loads of people having this problem you must talk to the tax people. They will probably accept that you need longer than 12 months to repay the debt but they have to be reasonable about it. I'm not sure but if you make a reasonable offer to pay per month, (the amount will be decided between you and the tax man), they can not take you to court over the debt as long as you keep to the payments agreed and pay on time. Good luck as this is a great deal of money to repay.

Answer 2

I have been in this situation, so please take my answer as my personal experience which I hope is good advice for you.



You have 2 problems

(1) this year you have about £700 less per month than you have got used to and

(2) you have to make serious repayments every month.



I guess you are about £900 a month worse off if say they agree to repayments of £200 a month.



The only solution to pay this back - and one way or another you will have to - is to get another source of income.



My solution was to moonlight in cash in hand jobs, £35 per night delivering take aways (less coz I used my car!) and bar work at times. Then I just outright got a second job, working at a call centre 5pm-11pm.



I survived my one year penalty. I since found an opportunity I wish I had for that year which i will share with you:

http://www.swatuniversity.com/referal/newcareer.php?agentid=189870

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No some hygene points: before you talk to HMCR get your spending history (how much you spend on what) and make a budget (what you propose to spend in the future). When you talk to them you should be the first to make a proposal to pay back say £5k per year over 3 years. Remember to make good points like - I will fininsh paying for my car next year so I will pay more then etc.



DONT admit you have done anything wrong! Just acknowledge that you owe them the money.



Remind them that the reason you were on WFTC was because you are/were a low income earner. You always trusted between HMCR and your employer the correct PAYE would be deducted, and never thought to doubt that or check.

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Dont worry too much. They are nasty but accommodating, the bottom line is if they cause people to declare bankruptcy, committ suicide, go to the watchdog etc they are not doing thier job right. You may be just one person, but as an aggrgate they know they have to accomodate you.



Good luck pal!

Answer 3

If they haven't already sent you a copy of COP26 - the HMRC Code of Practice "What happens if we have paid you too much tax credit?", you can download a copy at http://www.hmrc.gov.uk/leaflets/cop26.pdf



Generally if the Inland Revenue tells you that you have been paid too much tax credit, you may not have to pay it back if:

- it was caused by their mistake and you had no reason to think that your award was wrong, or

- paying back the money would cause you hardship



If you agree that you have been overpaid and paying the money back would cause you hardship, write to the Tax Credits office. Give them details of your current outgoings especially any debts you have, for example, mortgage repayments or rent, and ask them not to recover all or part of the overpayment.

Answer 4

i'm additionally interior an analogous boat. this is been 21 days. I talked approximately as IRS immediately and after being on carry for type of 20 min. The rep instructed me he could no longer tell me precisely what the issue is yet that I ought to obtain a letter in 2 weeks. i'm exceptionally specific this has something to do with the guidance credit, because of the fact each thing else on my return is exceptionally plenty an analogous this is been for 5 yrs. I filed with H&R Block, and clearly they did no longer comprehend plenty because of the fact the day previous I spoke to them and that they pronounced I ought to get it immediately. properly i did no longer!

Answer 5

they will accept payments over a longer period if its going to cause hardship, mind you they ask you to list all your incomings and outgoings. they did this to us, saying we owed them £10,000, and a few weeks ago they sent us a letter saying that ours was one of the cases where there had been an administrative error, and they were looking at it again, so fingers crossed that they change their minds