Withdrawing from tax credits

We have received our renewal forms from tax credits today but decided to withdraw from receiving it because of over payments. We can't afford to keep doing this but we have been told we still have to send in our renewal for the previous year and thats where they hit you. Has anyone else done this?

We have received our renewal forms from tax credits today but decided to withdraw from receiving it because of over payments. We can't afford to keep doing this but we have been told we still have to send in our renewal for the previous year and thats where they hit you. Has anyone else done this?

Yes, we did this. We had told them they were overpaying us, they denied it and then a year later they informed us they had overpaid us Luckily, because we had already spotted it we had seen it as an interest-free loan and were prepared for re-paying it. If I remember rightly you can send the form back and then ring up to cancel your claim.

We offered £50 a month and they agreed to this readily enough but if you need to offer much less they will probably ask you to provide details of all your income and expenditure. If they ask this of you make sure you include everything you spend so the repayments are reasonable.

They are a nightmare and a law unto themselves.

I phoned them today to say we are withdrawing because of overpayments. They changed my husbands tax code last year to reclaim it back which is wrong. Now they are saying they will take 50% of your monthly wage if you earned over £20,000!

I phoned them today to say we are withdrawing because of overpayments. They changed my husbands tax code last year to reclaim it back which is wrong. Now they are saying they will take 50% of your monthly wage if you earned over £20,000!

Looks like you should get some debt advice. You can try CAB, Step Change or National Debtline, ask them to negotiate on your behalf.

Will do if we hear anything after we have sent back the renewal form.

Will do if we hear anything after we have sent back the renewal form.

I hope it goes well, good luck.

I phoned them today to say we are withdrawing because of overpayments. They changed my husbands tax code last year to reclaim it back which is wrong. Now they are saying they will take 50% of your monthly wage if you earned over £20,000!

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.

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.

I think that depends. If you have a current tax credits award (which I know doesn't apply here) then they can deduct 100% of your monthly award to pay off a previous overpayment. The tax credits regulations are very loose and allow them to more or less do what they want. What they can claw back through an attachment of earnings should be limited by legislation which is why I think the OP should get advice. I wouldn't recommend blanking creditors, especially HMRC

I think that depends. If you have a current tax credits award (which I know doesn't apply here) then they can deduct 100% of your monthly award to pay off a previous overpayment. The tax credits regulations are very loose and allow them to more or less do what they want. What they can claw back through an attachment of earnings should be limited by legislation which is why I think the OP should get advice. I wouldn't recommend blanking creditors, especially HMRC

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.

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.

I was about to post that this was also my understanding

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?

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