Tax credit balls up and the bright side.
Discussion
Apparently I'm an idiot for failing to tell the tax credit part of HMRC that my oldest was off to university in October 2011, and I didn't realise my mistake until they asked in May 2012, for proof he was in full time education, when I realised that THEY meant below university level. The lady at the HMRC I spoke to admitted that 100's of people made the same mistake, and the latest documents are a bit clearer.
My excuse for this mistake was that a) they know I'm not claiming child benefit for him so surely they knew he was not at 6th Form, plus he's getting student loans, plus have you seen the paperwork and hassle of student loans and university halls and the like, (and I was doing my VAT and Corporation tax return that week too), plus I didn't imagine the difference would be so massive.
Eventually I got another letter, asking for proof of income, so I had to do my self assement early, and then last week we get 4 letters, (2 to me and 2 to the wife), where I spot that they think my daughter isn't going into sixth form. So I ring up and tell them that.
So the upshot is that betweem 1st Oct 2011 and April 5th 2012 they overpaid £1500, and between april and now they've overpaid £1000, but the award this year is £450, (and is likely to be similar next year. So when my daughter finish 6th form in Sept 2014, we sill still owe £1500, which we can apparently negotiate to ensure that paying it puts us under no hardship.
Now the wife is a bit upset, that I (obviously my failure, despite it being a joint claim LOL), am owing money to the HMRC.
But all I think is: Look on the bright side, the government has effectively lent me £2500 interest free, because they make everything so complicated, and don't and can't link up their own systems.
Am I being too flippant about it all ? The HMRC lent me money, and eventually will want it back, interest free. Wow hoo
My excuse for this mistake was that a) they know I'm not claiming child benefit for him so surely they knew he was not at 6th Form, plus he's getting student loans, plus have you seen the paperwork and hassle of student loans and university halls and the like, (and I was doing my VAT and Corporation tax return that week too), plus I didn't imagine the difference would be so massive.
Eventually I got another letter, asking for proof of income, so I had to do my self assement early, and then last week we get 4 letters, (2 to me and 2 to the wife), where I spot that they think my daughter isn't going into sixth form. So I ring up and tell them that.
So the upshot is that betweem 1st Oct 2011 and April 5th 2012 they overpaid £1500, and between april and now they've overpaid £1000, but the award this year is £450, (and is likely to be similar next year. So when my daughter finish 6th form in Sept 2014, we sill still owe £1500, which we can apparently negotiate to ensure that paying it puts us under no hardship.
Now the wife is a bit upset, that I (obviously my failure, despite it being a joint claim LOL), am owing money to the HMRC.
But all I think is: Look on the bright side, the government has effectively lent me £2500 interest free, because they make everything so complicated, and don't and can't link up their own systems.
Am I being too flippant about it all ? The HMRC lent me money, and eventually will want it back, interest free. Wow hoo
Strange thread. HMRC paid you money which you had wrongly claimed. Ignorance, whilst not normally a defence, seems to be in the world of benefits hence you don't need to repay interest purely the amount paid out, over some period of time. I don't think this is something you should be crowing about - the fact you can't correctly read or understand a form.
New POD said:
Am I being too flippant about it all ? The HMRC lent me money, and eventually will want it back, interest free. Wow hoo
That would be fine if you knew it was an interest free loan when you got it - its not so great if you were just spending as you went along, as you thought that money was yours. Now you're left owing a chunk of cash that you have absolutely nothing to show for as its been frittered away a fiver at a time...icetea said:
New POD said:
Am I being too flippant about it all ? The HMRC lent me money, and eventually will want it back, interest free. Wow hoo
That would be fine if you knew it was an interest free loan when you got it - its not so great if you were just spending as you went along, as you thought that money was yours. Now you're left owing a chunk of cash that you have absolutely nothing to show for as its been frittered away a fiver at a time...66comanche said:
Strange thread. HMRC paid you money which you had wrongly claimed. Ignorance, whilst not normally a defence, seems to be in the world of benefits hence you don't need to repay interest purely the amount paid out, over some period of time. I don't think this is something you should be crowing about - the fact you can't correctly read or understand a form.
It's not quite as black and white as that.I'm in the same boat as the op, because they paid us on an estimate, which turned out to be wrong, and when corrected, almost covered the deficit.
Can you tell me now, exactly how much, to the penny you'll earn for 2013/14?
Assumption on their part seems to be the way it goes, hence their being no penalty, or offence for getting the claim wrong. I haven't heard of anyone deliberately making a false claim, but I guess that would be serious?
I believe the tax credits computer system is fuelled by an infinite improbability drive, and the Tax Credits Ltd have shares in a paper mill. Whenever anything changes we get a stream of letters for a couple of weeks, all duplicated, all seemingly based on a randomisation of the information we presented.
We achieved significant overpayment about 5-6 years ago by misreading a form and this has remained unchanged ever since because they don't want to put us into hardship. I'm hoping they can't transfer the overpayment from tax credits to universal credit because it's not a pretty picture right now. We received a bill for the overpayment a couple of weeks back because we have finally hit the big time and no longer qualify for Tax Credits.
I shudder to think how much money is owed to Tax Credits by the country as a whole. If our position is anything to go by then I'd suggest Quite A Lot.
We achieved significant overpayment about 5-6 years ago by misreading a form and this has remained unchanged ever since because they don't want to put us into hardship. I'm hoping they can't transfer the overpayment from tax credits to universal credit because it's not a pretty picture right now. We received a bill for the overpayment a couple of weeks back because we have finally hit the big time and no longer qualify for Tax Credits.
I shudder to think how much money is owed to Tax Credits by the country as a whole. If our position is anything to go by then I'd suggest Quite A Lot.
It's an awful system (the brainchild of Balls and Brown).
It's hard enough for people in steady employment with fixed incomes to predict their income for the forthcoming year (which is what the application form requires - initially). Imagine how hard it is for those who don't have regular or predictable income - such as the self employed or those who work in a volatile sector of the economy.
And, as the OP found out, the system requires timely updates of changes of circumstances. The OP's problem was that he didn't realise that the change that should have been notified was a notifiable change - due to a misunderstanding of what the regulations define as "full time education".
And if you think the the OP was a bit dim for missing this, you need to realise that the definition of "full time education" and "child" varies within numerous pieces of government legislation - so it is very easy to get confused or make the wrong assumption..
It's hard enough for people in steady employment with fixed incomes to predict their income for the forthcoming year (which is what the application form requires - initially). Imagine how hard it is for those who don't have regular or predictable income - such as the self employed or those who work in a volatile sector of the economy.
And, as the OP found out, the system requires timely updates of changes of circumstances. The OP's problem was that he didn't realise that the change that should have been notified was a notifiable change - due to a misunderstanding of what the regulations define as "full time education".
And if you think the the OP was a bit dim for missing this, you need to realise that the definition of "full time education" and "child" varies within numerous pieces of government legislation - so it is very easy to get confused or make the wrong assumption..
My wife has always been pedantic about informing the tax credits people of any slight change. A couple of years ago she went from being self employed to being employed (earning slightly more - about 20-30 quid a month)and informed them as such. We were getting something like £50 a month from them. a few months later we got a letter advising that due to our change of circumstances we now owed them some huge amount of money which was about double what they'd paid us since starting to claim the tax credits.
We've heard nothing since, no "sorry we made a mistake" or "you still owe us £xxxxx" letters.
We've heard nothing since, no "sorry we made a mistake" or "you still owe us £xxxxx" letters.
Eric Mc said:
It's an awful system (the brainchild of Balls and Brown).
The OP's problem was that he didn't realise that the change that should have been notified was a notifiable change - due to a misunderstanding of what the regulations define as "full time education".
And if you think the the OP was a bit dim for missing this, you need to realise that the definition of "full time education" and "child" varies within numerous pieces of government legislation - so it is very easy to get confused or make the wrong assumption..
I consider myself to be of slightly above average intelligence in that I have some qualifications from a polytechnic that allow me to get a job and pay tax, and I have passed with a grade C "o" level english both litaratchaure and language, but I will admit to being a bit lazy, and chilled out when it comes to dealing with the HMRC. The OP's problem was that he didn't realise that the change that should have been notified was a notifiable change - due to a misunderstanding of what the regulations define as "full time education".
And if you think the the OP was a bit dim for missing this, you need to realise that the definition of "full time education" and "child" varies within numerous pieces of government legislation - so it is very easy to get confused or make the wrong assumption..
On the Form for April 2011, to April 2012, it says under my son's name : In full time education. Not in full time secondary education. It was only in may 2012 when they asked me to prove he was in full time education, with a list of things that would prove it, and I phoned up to ask, "would a student loan award letter be proof enough ?" that I realised MY mistake. but as the lady said, "we have 100's of people do that sir, and yes the child benefit system automatically assumes they are not in full time education unless you prove it to us first, but no we don't have the means to link the information "
So that was £1455 overpaid.
Then she says "You'll continue to be paid at the current rate, whilst we recalculate" So they overpaid £1000 (ish) whilst they recalculated.
Well, I'm going to be in hardship, because I was getting £250 a month, and now I'm getting feck all. Not that I'm entitled to much, but hey, my finances and budget are based around a lie. And that's ignoring the fact that in 2 years they'll want me to set up a direct debit, so they can spunk the rest back over the next 2 to 20 years.
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