Withdrawing from tax credits

[Michaeldyn]

Tell them to clear off; they aren't allowed to ask for you to pay back debt at an amount that will cause you financial hardship, that's the point of the income vs. expenditure forms.

 

So a family on low income getting tax credit to top up their income to be just able to live on will never need to pay a fine?

[the_bloke]

So a family on low income getting tax credit to top up their income to be just able to live on will never need to pay a fine?

 

What fine?

 

Fines have to be paid, but if you can't afford to pay them up front they can be spread out.

 

https://www.nationaldebtline.org/EW/factsheets/Pages/magistratescourtfines/magistratescourtdebt.aspx

[Anna B]

Has anyone challenged this dire state of affairs in court?

 

It sounds like it happens often, is the fault of the benefits/tax office, and leaves people in serious distress through no fault of their own; in which case it needs looking at in a court of law. Especially when you consider the kid glove treatment given to wealthy tax dodgers.

[AlAN J]

The problem with working tax credit is no one can work out how they come to the figure they pay you.

[Bob Arctor]

The OP didn't mention them deducting the monthly award, they mentioned earnings; some Googling suggests they've either been told the wrong thing, or they've not understood what they were told.

 

From http://www.litrg.org.uk/tax-guides/tax-credits-and-benefits/tax-credits/what-can-i-do-if-i-have-overpayment

 

If you do not receive the maximum amount of tax credits, but your payments are higher than the family element of child tax credit (around £545 a year in most cases) and your household income is £20,000 or less then your ongoing payments can be reduced by up to 25 per cent.

 

If you do not receive the maximum amount of tax credits, but your payments are higher than the family element of child tax credit (around £545 a year in most cases) and your household income is more than £20,000 then your ongoing payments can be reduced by up to 50 per cent.

 

In other words, they'll cut your tax credits by up to 50% until the money is recovered. They don't touch your earnings from work, which is what it sounds like you were told.

 

But the OP is saying they are going to surrender their claim in which case surely none of this will apply. So HMRC will invoice them for the full amount of overpayment and if the OP doesn't make an installment offer that HMRC accept then they will look to go for an attachment of earnings.

 

---------- Post added 10-06-2016 at 07:18 ----------

 

The problem with working tax credit is no one can work out how they come to the figure they pay you.

 

Yes. They give you the option of appealing their decision but can't explain how they arrived at the decision and the claimant has no idea either!

[cherriepie]

Thanks everyone for all your comments. When we have had an overpayment of WTC they have clawed it back by changing my husbands tax code which is wrong! It seems everytime you send in your yearly renewal they ask you to estimate your following years earnings which is also wrong and thats how they get you. Thats why we've decided to withdraw from claiming it's not worth the hassle.

[Cyclone]

Could you estimate on the high side for earnings, so it turns out that they've underpaid you every year?

[Tomjames]

Why not put renewal in anyway. You are liable to pay back the whole amount.

[Anna B]

We have the most complicated tax system in the world. As for benefits, tax credits etc, this Government is tying everything up in so much red tape, nothing can function properly anymore. Add to that the fact that as they over-complicate things they also cut staff to deal with it, and you have a recipe for disaster.

 

It's a government ploy, and if you give up, it's working.

 

Heaven knows how much it's costing the country in appeals and tribunals, but one things for sure, there are a lot of lawyers and accountants getting very rich.

[Cyclone]

 

Heaven knows how much it's costing the country in appeals and tribunals, but one things for sure, there are a lot of lawyers and accountants getting very rich.

 

Are there? Do you know any?

 

I know people in both professions and none of them have ever mentioned the gravy train of working for poor people who claim benefits and want to appeal something.