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The following are common questions that we have been asked both on our website and generally. The list will be updated regularly for new queries or other material which you might find useful. In addition you are encouraged to write to us using our Contact page with issues you do not think are adequately covered in this part of the website. It is also worth having a look at the Revenue's section on tax credits FAQs which you can find here. There is also a further FAQs section on the HMRC website on examinations and enquiries which you may find useful. Frequently asked questions (FAQs) Working Tax Credit (WTC) & Child Tax Credit (CTC)
Passported Benefits Complaints & Appeals Working Tax Credit (WTC) & Child Tax Credit (CTC) Can pensioners claim tax credits? Yes - there are no upper age restrictions claiming tax credits providing you meet the qualifying criteria. Working Tax Credit
Child Tax Credit
Do I have to have children to claim Working Tax Credit?
I am a student - Can I claim tax credits?
Do my savings affect the amount of tax credits I can get?
Payments (including overpayments) HMRC has written to tell me that they have paid me too much. How can this happen?
I have an overpayment - Do I have to pay this back immediately in a lump sum?
Can my tax credits be stopped or reduced during the tax year? In-year overpayment
End of year overpayment
Do I have to tell HMRC about a rise in my income during the year?
Passported Benefits Can I get free prescriptions if I get tax credits?
Complaints & Appeals I have an overpayment - Can I appeal against this?
Below are some case studies showing a number of cases that LITRG have helped with over the last couple of years. It is important to note that all of these cases were decided under the old reasonable belief test. We have not yet received any decisions under the new test, but these will be added as they become available. (see the overpayments section for explanation of two tests). Mr & Mrs J Mrs J was receiving Income Support prior to living with Mr J. When they became a couple and started living together Mrs J stopped receiving income support as Mr J was working full time. They applied for tax credits. Their first tax credits award showed that Mrs J was still claiming Income Support despite the fact it also listed Mr J's full time earnings. This was an error on the part of HMRC as Mrs J had ceased claiming Income Support when she began living with Mr J. The consequence of this error was that Mr & Mrs J received maximum tax credits with no reduction based on Mr J's income. Mrs J contacted HMRC after she received her award notice but the mistake was not corrected for over 14 months. During this period Mr & Mrs J received 7 incorrect award notices. Mrs J continued to contact HMRC after each incorrect notice. We wrote to HMRC on behalf of Mrs J requested that the overpayment be written off under the HMRC guidance in their COP 26 leaflet. We argued that Mrs J had notified a change which was not effected until some 14 months later and that she had repeatedly contacted HMRC during this period to inform the change had not been implemented. Under their own internal guidance in the New Tax Credit manual we argued it should be written off. This was successful and the overpayment of approximately £3500 was written off. In an interview with the Times Mrs J said: My husband came across the LITRG online, in Feb last year. Talking to them was a breath of fresh air. We sent in all of our award notices, letters and telephone bills. We left the matter in their hands, and in July got the brilliant news: the Revenue had agreed to write off the money and LITRG made sure the payments had restarted, at the correct amount. It was a huge relief, no more worrying about money. If it was not for the LITRG, we would be in the same mess. Ms B Ms B and her partner claimed Child Tax Credit (CTC) when her partner started to receive Job Seekers Allowance. They should have been entitled to maximum credits for two children, one of whom was disabled. Four months after applying they had heard nothing and were struggling to live with no money to support their children. When they contacted the helpline they were told that there was a problem with their claim but that no-one could tell them what it was. They were told to wait. After a further two months they went to their local tax office. By this time they had accumulated several debts as they were living on only the couple rate of Job Seeker's Allowance. Their local office arranged for manual payments to be made at a rate of £260 per month, and although we later found this to be much less than their actual entitlement of over £500 per month, the couple were grateful. For the following 8 months they received these manual payments by giro but still their tax credit claim had not been processed. They eventually contacted us and we were able to contact HMRC on their behalf. The couple immediately received nearly £5000 in backdated credits for the previous two tax years and their monthly payments went up to over £500 per month. The computer problem which appeared to be stopping the processing of their claim was resolved and an award notice was finally issued. Mr & Mrs R Mr R is disabled and runs his own businesses. Mrs R works full time and they have 1 son. They had been underpaid Child Tax Credit by over £1,000 and despite many attempts, including via their MP, they were unable to have this rectified. The error was simple in that the TCO had not noted that their son was continuing in full time non advanced education. This was despite several letters from Mrs R. There were also additional errors with their award which have also been rectified. After LITRG intervention they received the additional amount immediately and compensation for the delay. Mrs R emailed us saying: You and your Department have been meticulous with your calculations for which we thank you. Many thanks for all your help with all our issues. We have really appreciated them. As you know even our MP could not get the TCO to reinstate the CTC. To be honest I'm not sure what we would have done regarding all the issues with the TCO if your Group had not helped us. Ms W Ms W had a large overpayment of £7,100. This was partly due to an error on Ms W's part but also due in part to Revenue error which meant Ms W could not reasonably have known her payments were wrong. Despite numerous disputes and intervention of her MP the overpayment remained. Following a detailed examination of the case LITRG were successful in getting the overpayment reduced by £2,300. Ms W wrote: Thanks for all you have done for me - there's now about £2,300 less to repay hanging over my head. Thank you so very much for your help and giving me some hope when otherwise I should not have had any. Mrs G Mrs G visited her local tax office in April 2004 to explain that the income on her award notice was considerably higher than it should be. She took evidence of her actual income as well as a copy of her Disability Living Allowance entitlement letter. She was told at this visit that her award contained various errors and that it would be revised in her favour. She was also told that she was entitled to extra money because of her disability. Shortly after this Mrs G received a new award which did increase her tax credits. It showed that she was now entitled to a severe disability element (in addition to the disability premium she was already receiving). Confused as to what these elements were for, Mrs G returned to her local tax office to question this. She was told that this severe disability element equated to the higher rate mobility component of her Disability Living Allowance. In fact this information was incorrect, the severe disability element is only payable if you receive the higher rate of the care component of Disability Living Allowance. However, Mrs G did not know this, nor could she ascertain this from the notes accompanying her form due to dyslexia. Mrs G presumed her award was correct as she had sought advice from her local tax office. Eventually her award was changed and the severe disability element was removed. This left an overpayment. Mrs G requested that this be written off, however the tax credit office refused to write it off. At the end of 2005 we wrote to HMRC on behalf of Mrs G. We argued that Mrs G had provided the correct information at all times and that the severe disability element was added in error by HMRC following erroneous advice from Mrs G's tax office. In our opinion it was therefore entirely reasonable for Mrs G to believe her award was correct. We requested that HMRC write the overpayment off under COP 26. Initially HMRC argued that it was not reasonable for Mrs G to think that her award had been right. Even though she was wrongly advised by her local tax office that she was entitled to the severe disability element, it was not reasonable for her to believe them because the conditions for receipt of the severe disability element were 'clearly stated' in the guidance notes accompanying her claim form. We reminded HMRC that Mrs G had difficulty in following complex reading matter such as guidance notes to forms because of her dyslexia, and it was for that reason that she had sought advice from her local tax office. Finally HMRC accepted our argument and wrote off Mrs G's overpayment in full. Mrs G said: Thank you very very much for all the help you have given me, words can not express my gratitude and if any way my problems will assist in, 'A new Style TC', then it can only be for good, although I doubt it will be in my life time Mr & Mrs S Following a system error during 2004/2005 Mr & Mrs S received a new award notice which increased their tax credits from £545 per year to nearly £6,000 per year. The details on the award notice, including their incomes, were correct. However due to the system error HMRC had calculated their award with a nil income - thus entitling them to maximum tax credits. Mrs S is disabled and suffered severe stress in trying to dispute this overpayment with the Revenue. HMRC argued that Mrs S should have realised that her payments had increased substantially and that they had no record of a phone call Mrs S made to check these new payments during which she was re-assured the money was hers. Following intervention by LITRG and a further letter disputing the overpayment the whole amount of nearly £5,000 was written off. At present we are dealing with a request for compensation for Mr & Mrs S under the Revenue complaints procedure. Miss L Miss L contacted LITRG after her tax credits stopped unexpectedly. Miss L was a lone parent with 2 small children. She relied on Child Tax Credit as her main source of income alongside her Income Support payments.When her tax credits stopped she immediately contacted the helpline who informed her that it was a technical error and it would be fixed immediately. After 2 weeks without payments, and repeated attempts to contact the helpline, Miss L went to her local Job Centre Plus to request a crisis loan. At this point she had little money to feed her children, having to live off approximately £54 per week. This was refused because the Tax Credit Office assured Jobcentre Plus that payments were imminent. After contacting her MP and failing to get her payments re-started, Miss L came to LITRG. By this time Miss L had not received tax credits for some 2 months. She had to send her children to stay with a family member as she could not feed them. She was forced into debt as she could not meet her essential bills and then had her phone cut off for non-payment. In addition because her tax credits had stopped she no longer received any milk tokens. LITRG contacted HMRC and Miss L received a backdated cheque and weekly manual payments immediately. She also received compensation. Unfortunately it took many weeks to re-start her milk tokens, but again these were backdated. After further intervention by LITRG, Miss L is now receiving her correct tax credits into her bank account and her award is free from problems. Mr & Mrs W Following a system error during 2004/05 Mr & Mrs W received a new award notice, which increased their tax credits from £545 per year to nearly £7,000 per year. The details on the award notice, including their incomes, were correct. However due to the system error HMRC had calculated their award with a nil income - thus entitling them to maximum tax credits. HMRC argued that Mr and Mrs W should have realised that their payments had increased substantially and that they had no record of a phone call Mrs W made to check these new payments during which she was re-assured the money was hers. Following intervention by LITRG and a further letter disputing the overpayment the whole amount of nearly £1,300 was written off. Mrs R Mrs R is a pensioner who contacted LITRG as she was repaying an overpayment at £111 per month. This was causing her substantial hardship. Upon receiving copies of the paperwork we realised that Mrs R had her Working Tax Credit claim terminated in error for non-renewal. When a person fails to renew, any payments received in that tax year to date become a recoverable overpayment. HMRC therefore wrote to Mrs R and asked her to repay nearly £1,300. By the time she came to LITRG she had paid nearly half of this back. Despite many written requests, Mrs R still did not understand what had gone wrong and why she had to pay the money back. LITRG contacted HMRC and explained the error that had occurred. The overpayment has now been remitted and Mrs R received a cheque for nearly £700. Mr D Mr D applied for tax credits at their inception in April 2003. In November 2003 Mr D and his family moved to Spain, and he informed HMRC. Consequently his annual review papers for 2003/04 and his remaining award notices were sent to his new home in Spain. Shortly after his annual review in September 2004 he received a letter from HMRC asking about his move to Spain, whether it was permanent, the date he moved, and so forth. Mr D promptly sent back a response, which we know HMRC received, because the Data Protection Unit sent it to us in response to a Subject Access Request (SAR). Mr D's tax credits payments were continued. Mr D presumed that as he had informed HMRC of his move, and they were sending award notices to his new home in Spain, he was still entitled to these tax credits. In November 2005 Mr D wrote to HMRC informing them that he was moving to Germany. Again this change was processed and his award notices were then sent to his new address in Germany. Finally in April 2006 Mr D's tax credits stopped. The reason given was that he was not entitled to tax credits after he left the UK in November 2003. The overpayment was in the region of £10,000. Mr D disputed the overpayment on the grounds that he had informed them promptly of his move (evidenced by the award notices) and thus thought that because HMRC accepted this and continued to pay him there must be entitlement. This dispute was refused on the grounds that HMRC did not know of his move until April 2006. Mr D disputed the overpayment again. He explained in a very detailed letter that HMRC had been sending his award notices to Spain since April 2004 and therefore must have known of his move. He included copies of all of these notices. Again HMRC refused to write off the overpayment, again on the grounds that HMRC did not know of his move until April 2006. Mr D, extremely frustrated at this point, made a Subject Access Request (SAR) for copies of all of his documents held by HMRC. He obtained a copy of further documentation showing that he had answered questions in September 2004 about his move and confirming that all correspondence had gone to Spain and then Germany since at least August 2004. Mr D disputed the overpayment again, this time including copies of the documentation he had received from HMRC's own records. HMRC again refused to write off the overpayment, yet again on the grounds that Mr D did not inform HMRC of his move until April 2006. Mr D contacted LITRG in December 2006. We reviewed all of the evidence that was sent to us and consequently wrote a dispute letter to HMRC. The overpayment stood at close to £12,000, this was finally remitted in full from April 2003 onwards. |
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