Memorandum submitted by Citizens Advice,
1. Problems with tax credits administration
continue to be a frustrating and time consuming issue for both
claimants and CAB advisers and remain the biggest single policy
issue for Citizens Advice in Northern Ireland. While there have
been some improvements since the last time we gave evidence before
the Treasury Sub-Committee in January 2006, the following issues
outlined in this submission show the high level of intervention
required by advisers in some tax credit claims making the process
labour intensive over lengthy timescales.
1.1 While the advice sector in Northern
Ireland is now represented on the Tax Credits Consultation Group,
this meeting is not a forum to resolve the many more operational
and technical issues which have been highlighted in our submissions
to the Treasury Sub-Committee. We have strongly advocated for
the return of some local contacts within HMRC through which we
can resolve the many issues highlighted to us by clients. A caseworker
type approach which is more client-focused and allows responsibility
to be taken to progress a case from start to finish is urgently
required particularly for complex cases.
1.2 Problems with overpayments continue
to be the biggest issue with tax credits administration, which
can leave claimants in considerable financial hardship. While
we acknowledge the steps taken by HMRC to reduce the number of
overpayments, namely the introduction of the £25,000 income
disregard since April 2006, we have yet to see the effect of this
on the number of overpayments. We wait to see exactly how this
disregard will affect the number of overpayments, or claimants'
abilities to budget, given the likely fluctuations in their tax
credits awards. Regardless of the effect of the income disregard
the process of disputing overpayments needs be simplified and
shortened and we again call for the introduction of an independent
right of appeal on tax credit overpayment decisions.
1.3 A range of operational problems with
tax credits administration including problems with paperwork,
delays in receiving responses, ongoing technical problems, inaccurate
information from the various tax credits helpline/local enquiry
centres and a lack of internal communication between HMRC departments,
as well as externally with the public, all impact negatively on
how the system operates and must be addressed in order that claimants
are not affected.
2. Citizens Advice Northern Ireland is grateful
for the opportunity to provide evidence to the Treasury sub-committee's
follow-up enquiry into the administration of tax credits, as problems
with the tax credits system affect a large number of CAB clients
in the province.
2.1 Citizens Advice NI is the largest advice
charity in Northern Ireland working against poverty and meeting
the information and advice needs of some 250,000 people per year.
2.2 In the year 2005-06 Citizens Advice
Northern Ireland dealt with over 14,400 tax credit queries, issues
that now account for one of the biggest areas of enquiry received
by Citizens Advice Bureaux in the province. During this period
tax credit enquiries showed a significant increase of 14% on the
previous year, and indeed tax credit enquires have been increasing
year on year making it a growing area of concern.
2.3 In 2006 tax credit problems were the
biggest single social policy issue identified by Citizens Advice
Bureaux advisers in Northern Ireland. The social policy forms
sent in by CAB advisers provide clear and powerful evidence of
the problems and difficulties faced by both clients and advisers
with the administration of tax credits (a sample of social policy
returns in relation to tax credit problems is provided in the
2.4 While Citizens Advice Northern Ireland
acknowledges that HMRC is taking steps to improve the administration
of the tax credits system we believe that the points highlighted
in this document, and the subsequent recommendations, need to
be urgently addressed in order that the tax credits system meets
its stated objectives of "tackling poverty and making work
3. Prior to April 2005 customers and advisers
in Northern Ireland had access to a dedicated customer services
facility within HMRC in the province. Cases could be referred
to this team where they were particularly complex or could not
be resolved through the tax credits helpline. This allowed for
the development of close working relationships with key contacts
within customer services in Belfast and meant that in almost all
cases problems were resolved more quickly. This caseworker type
system worked well as lines of communication were clear and open
3.1 In April 2005 the duties of the Customer
Services Team in Belfast were transferred to England and integrated
with the services for intermediaries in Great Britain. Removal
of local Northern Ireland contacts has impacted on our work considerably
and we have seen a reduction in the level of service provided
by HMRC. Since this time advisers in Northern Ireland have continued
to report greater dissatisfaction with the service and find it
much more difficult to resolve complex and emergency queries.
This adds to the time taken to resolve tax credit queries and
in some cases can leave clients in very severe financial hardship.
3.2 Local Northern Ireland customer service
contacts should be reinstated to provide a caseworker type approach
to solving problems where named contacts are given, ownership
of issues is taken and the caseworkers within HMRC have the knowledge
and technical capabilities to sort out complex and urgent cases
in a timely and efficient manner. This reinforces the recommendation
made by the Treasury Sub-Committee that a more client-focused
approach is essential particularly if their cases are complex.
Tax Credits Consultation Group
4. Following evidence given before the Treasury
Sub-Committee, advice agencies in Northern Ireland have been invited
onto the Tax Credits Consultation Group. This is now the only
route Citizens Advice Bureaux advisers have through which to progress
tax credit issues which are not or cannot be resolved through
the various Tax Credits Helplines.
4.1 This group is intended as a forum to
discuss policy issues, however, representatives from Northern
Ireland have been forced to use this group as a means through
which to pass any complex or urgent issues/cases in order to get
some resolution in the absence of any other suitable alternative.
4.2 While we welcome the opportunity to
contribute to this group it is not a suitable forum through which
to resolve more complex operational issues with individual cases.
The Consultation Group does not provide the same level of detailed
information that advisers need to be able to deal with clients
effectively. Requests for detailed technical information about
tax credit procedures are often met with general policy responses.
In addition, the time taken to resolve issues through this group
can be lengthy and the current format of a bi-monthly meeting
is inappropriate to address urgent cases. It has also been pointed
out that the volume of issues raised by the Northern Ireland representative
is beyond the capacity of the group to adequately resolve. Advisers
do not have direct access to staff within HMRC who can answer
their queries and all issues must be e-mailed to the Secretary
of the Group.
4.3 A high level technical workshop for
Tax Credits Consultation Group members has been arranged for late
March 2007 (in London) to focus on particular areas of tax credits
delivery which can cause uncertainty or difficulty for tax credit
claimants. While we welcome this development it has taken some
time for this to be offered to the voluntary sector and it is
costly for Northern Ireland representatives to attend these centralised
meetings held in England. Even where the costs of attendance can
be met we have received no confirmation that this event will be
repeated let alone repeated frequently enough to solve issues
in a timely fashion.
4.3 A faster and more and efficient way
of addressing urgent or complex matters, that currently cause
unnecessary delay in dealing with client's cases and create huge
workloads for CAB advisers, is urgently needed, such as the caseworker
approach detailed in paragraph 3.2.
Resource implications for CAB
5. HMRC has provided some funding to Citizens
Advice in Northern Ireland for various initiatives to help with
the administration of tax credits. Money has been made available
to fund essential and necessary training for CAB advisers on the
tax credits system. Some funding has also been made available
to operate a consultancy type service on tax credits to allow
the sharing of specialist knowledge within the Citizens Advice
Bureaux network. Both have proved to be in great demand.
5.1 The problems with the administration
of the system continue to have an impact on frontline advice services.
The increase in number and the length of time taken to deal with
tax credit enquiries has had an impact on limited resources and
the ability to cope with demand for our services. Therefore, the
main resource requirement for CAB is a need to fund more frontline
advisers to provide the necessary advice and assistance with tax
credits claims and disputes. While the existing funding received
from HMRC towards training costs and consultancy is welcomed,
there is a wider need to link this into actual service provision
through the funding of additional frontline advice work generated
by the tax credits system.
5.2 HMRC should issue and award service
delivery contracts to the voluntary advice sector for face-to-face
advice to the public on tax credits, especially given the value
and complexity of the work undertaken. This should be seen in
the context of a growing cross party view that the voluntary sector
has an important role to play in the delivery of public services.
Time taken to resolve complaints
6. A complaint can be made on any aspect
of the tax credits system, basically on anything which cannot
be appealed, including disputing an overpayment. HMRC have a stated
aim to acknowledge all complaints within 48 hours of receipt,
and where complaints take longer to resolve they would keep the
customer informed. This has not been the experience of CAB advisers.
6.1 Resolving complaints on tax credit issues
can take a long time. It is the experience of our advisers that
this is an endemic problem within the tax credits system and something
which needs urgent attention. In some cases responses to complaint
letters submitted by clients or advisers are not received for
many months, thus leaving some clients suffering real hardship.
In some cases, even when a reply is received, it often fails to
address all the points raised in the original complaint.
6.2 A number of case examples have been
provided to the Tax Credits Consultation Group for examination
on this issue to illustrate how long replies to complaints are
taking, but we believe this issue needs to be addressed at a strategic
level by senior management at HMRC. Clients who contact the advice
sector will benefit from representation at the Tax Credits Consultation
Group, however, individuals who do not seek assistance will be
subject to long delays in getting their complaints dealt with.
6.3 The issues around delays in responding
to and resolving tax credits complaints, particularly in overpayment
cases where the client is not at fault, needs to be dealt with
urgently at a strategic level by senior management within HMRC.
7. Overpayments remain one of the biggest
issues with the administration of the tax credits system, leaving
many clients in severe financial hardship. Advisers and clients
report delays in receiving replies to correspondence, technical
problems with no apparent resolution and insufficient replies
to disputed overpayments which do not answer all the points raised,
and do not fully explain the reason for the overpayment. These
problems, coupled with a lengthy and complex process for disputing
overpayments, which in turn does not provide for an independent
right of appeal, do little to help simplify this process.
7.1 Where a claimant alleges that an overpayment
has arisen through an HMRC error, the claimant must prove that
it was "reasonable" for them to believe that their award
was correct. This test of reasonableness is undefined and does
not appear to be applied consistently by HMRC staff, which in
turn leads to many problems for claimants.
7.2 There is inconsistency in decision making
regarding disputed overpayments. We believe that decisions are
often made without taking into account all the facts of the case
as overpayments that occurred in almost identical circumstances
have been decided upon differently.
7.3 Recovery of an overpayment is only suspended
during the first stage of the lengthy overpayment dispute process.
This means that once an initial negative decision is received
by a claimant HMRC continue to recover an overpayment even though
the claimant may further dispute the overpayment in question.
7.4 In relation to recovery of overpayments
there has been a worrying development. Clients have been receiving
letters in relation to overpayment recoveries warning of possible
court action if the amount is not repaid. Overpayment disputes
on these cases have been ongoing, with initial negative decisions,
followed by further letters of complaint which in turn have not
been replied to. The letters give clients seven days to pay otherwise
court proceedings will begin. We have asked HMRC for their debt
recovery procedure where there is an ongoing dispute, as there
appears to be no standard procedure for dealing with this. In
the meantime claimants are being threatened with court action.
7.4 Claimants need to be provided with clear
information regarding the reason for an overpayment and their
rights to dispute it.
7.5 Challenging overpayments should be easier
and an independent right of appeal should be introduced. This
supports the findings of the Treasury Sub-Committee who "strongly
support... the introduction of a right of appeal to an independent
tribunal against a decision by HMRC on a disputed overpayment"
and the further recommendation that legislation to allow this
right of appeal is introduced as a matter of priority.
7.6 We recommend that HMRC provide detailed
guidance on their definition of what is reasonable in "it
was reasonable for you to think your payments were right"
test contained in COP26.
7.7 We recommend that HMRC monitor the decision-making
standards for tax credit overpayments and other decisions to ensure
consistency and accuracy.
7.8 We also recommend that the suspension
of recovery of overpayments is extended beyond the first stage
of the overpayments dispute process to the entire overpayment
dispute period no matter how long this may take.
7.9 The procedure for debt recovery in cases
where a dispute is ongoing, following an initial negative decision,
needs to be clarified as claimants are receiving letters threatening
court action even though they are disputing the overpayment.
8. There remain a range of operational problems
with the administration of tax credits which can also have negative
impacts on clients.
8.1 Problems with paperwork. Clients
are often inundated with computer generated award letters and
other correspondence from HMRC which can be difficult to understand
or contradictory in content, and clients are often confused about
what action they need to take. However correspondence from claimants/advisers
which is sent to HMRC is often ignored and goes unanswered. Citizens
Advice continues to receive evidence from clients that payments
just stop or are reduced without any documentation being received
to explain what is happening with the award.
8.2 Award notices should detail clearly
how an award has been calculated, should be sent out before there
are any changes to an award to explain the date and reason for
the change and detail the amount and reason for any overpayment.
The action a claimant is required to take should also be clearly
8.3 We recommend that HMRC acknowledge and
action all correspondence received from tax credit claimants/advisers
within set deadlines.
8.4 Computer problems. There seems
to be a range of technical problems with the computer system employed
by HRMC which appear to have no immediate resolution. Automatic
payments cannot be made and claimants either do not receive any
payments at all, receive incorrect payments or have to have their
payments processed manually (which often leads to an overpayment
situation when a particular technical problem is resolved).
8.5 We recommend that HMRC conduct a review
into the range of technical errors which are still occurring on
the computer system used for tax credits, and ensure that all
necessary resources are directed to permanently fix these problems
in order that claimants are not adversely affected by these internal
8.6 The issue of overpayments occurring
as a result of manual transactions being made on a case with technical
issues which is then resolved, and automatic payments reinstated,
needs to be addressed as claimants are being penalised for something
which is beyond their control.
8.7 Information from HMRC Staff. There
continues to be evidence of incorrect and inadequate advice from
Tax Credits Helpline staff and from staff in the local Enquiry
Centres. In some cases claimants have reported changes of circumstances
to HMRC staff and these have not been actioned or there has been
a delay in getting this information added to the system which
can lead to incorrect awards and resulting overpayments.
8.8 We recommend that the training provided
for all HMRC staff who deal with tax credit queries is widened
to include all aspects of tax credits, for example, claims, overpayments
and interactions with other social security benefits, so that
claimants are provided with full and accurate information regarding
8.9 We recommend that HMRC ensure that all
changes of circumstances reported by tax credits claimants are
actioned quickly and efficiently.
8.10 Communication between HMRC departments.
The lack of communication between different tax credit departments
involved in a claim often results in a lack of continuity in following
up problems with cases leaving claimants completely uninformed
about the progress of their case. In some cases HMRC staff deal
with letters received by claimants or CAB advisers without checking
the history of the case and any previous actions taken on the
case by other staff members. In a recent example which has been
highlighted to the Tax Credits Consultation Group problems arose
as the Debt Recovery Team in Cumbernauld did not appear to know
about the existence of or the procedures for referring to the
Debt Management Team in London to which all jointly and severally
liable disputes are referred.
8.11 There needs to be more joined-up working
between the different departments involved in tax credits so that
ownership is taken of a case and it can be progressed efficiently
even if several different departments need to become involved
to resolve the case.
8.12 External communication issues. HMRC
have acknowledged that there is room for improvement on this issue
and we welcome this. In order to advocate on behalf of our clients
we need to have access to timely information about changes to
policy and procedure before they are introduced. It has often
been the case that advisers find out about changes to policy and
practice after the changes have been introduced which adds to
their workload and frustration with the system. It would also
be useful to get Northern Ireland specific information where the
situation differs in Northern Ireland. For example, when the new
rules regarding young people on training schemes following the
extension of Child Benefit was introduced Northern Ireland specific
information was very difficult to access and in many cases the
wrong information was given out on the helpline.
8.13 We recommend that HMRC notifies the
advice sector in advance of any changes in policy or procedure
that are likely to have an impact on tax credit claimants so that
we can be properly equipped to help claimants.
A client of North Down CAB is being "hounded"
by HMRC regarding a tax credits overpayment even though the client
had reported all changes in circumstances throughout her claim.
When the bureau initially contacted the Helpline the adviser was
told that nothing would have to be paid because any change in
circumstances had been reported by the client. Now HMRC are saying
that they have no record of changes being reported and are demanding
a payment of over £300. The adviser bureau wished to highlight
this as a continuing issue with tax credits where overpayments
are being claimed from clients despite proof of clients reporting
changes of circumstances. The bureau feels that this is very unfair.
A client contacted Down District CAB
about a tax credit overpayment. The client is a single parent
with 3 children. Her eldest daughter stayed in full-time education
until she was 16 years old. The client informed HMRC of the change
in circumstances when the circumstances changed and the award
was reduced. Her second daughter stayed in full time education
until she was 17 and then went to University. The client again
got in contact with HMRC and the award was reduced. The client's
youngest daughter left school at 16 and then returned to college
for two years and left in June 2004. The client reported this
to HMRC and was informed that as he daughter had left full time
education she would no longer be able to claim CTC and her payments
were reduced to approximately £8 per week. The client continued
to receive this payment until early 2005 when payments were stopped.
The client then received a letter saying that she had been overpaid
CTC of approximately £1,200. The client queried this with
HMRC and was then informed that she actually owed £4,000
in overpayments. The client disputed the overpayment through the
complaints process in 2005. She heard nothing more about this
until January 2007. The client returned home from work and found
a hand delivered letter had been posted through her letterbox.
The letter said that someone had called at her house that day
regarding her overpayment of CTC and gave a contact number for
the client to get in touch. The client contacted the number and
informed HMRC that she had formally disputed this overpayment
in 2005 and that she had not been contacted again since. The client
was informed that there was a record of the complaint being lodged
but that all the other information about the claim had been lost.
The client was sent out new complaint forms to complete and return
which she did in January 2007. The client received a letter in
February 2007 saying that because the complaint had not been received
she could no longer pursue this matter and that her overpayment
case has been forwarded to the Magistrates Court. The client is
extremely concerned about the way this case has been dealt with
by HMRC and the subsequent threat of Court action.
A client of Down District CAB is married
with one child. She is entitled to tax credits but her payments
have recently stopped. The client contacted the Helpline and was
told that this is due to an overpayment from the previous year.
The client`s payments will not start again until the middle of
April 2007. The Helpline have told her that they have sent out
a form to dispute the decision. The client cannot afford to pay
her childminder and does not know what to do. She tried to explain
this to the Helpline but was just told to complete a complaint
form. HMRC just stopped this client's award without prior notice
leaving her in severe financial hardship.
A client of Cookstown CAB has been off
work sick for six years. He is aged over 50. He started work again
in May 2006 and stopped claiming Income Support and claimed WTC.
He is single with no children. He had to stop work again at the
end of August 2006 due to his health. He reclaimed Income Support.
He received a lump sum from HMRC of £2,500. He has been in
contact with HMRC regarding this and they have advised him that
when he made his claim for WTC it was payable for a period of
one year and that it doesn't matter if you stop work. He has spoken
to the Helpline about this and has been advised that he is entitled
to £112 per week WTC even though he is claiming Income Support.
The client wanted to check this was correct. The wrong advice
was given to this client by the Helpline which will lead to the
client having a large overpayment of WTC and may also lead to
problems with his Income Support claim.
A client of Newtownabbey CAB called into
the bureau with a tax credit enquiry. The client's son was awarded
high rate care and low rate mobility of DLA and the client notified
HMRC of this change of circumstances. The client then received
a letter in January 2007 stating that as a result of the change
of circumstances she is no longer entitled to tax credits and
that she owes HMRC over £5,600. The client was very stressed
about this as she cannot afford to pay this back. The client is
also being paid by manual payments due to a computer error. The
bureau completed a benefits check for the client which actually
showed an increased entitlement to tax credits. The bureau contacted
the Helpline on the client's behalf and was told it was an error
which is being fixed and her entitlement will continue. The bureau
was also advised that the client will continue to be paid manually
as the error in her computer claim cannot be resolved.
A client of Lisburn CAB informed HMRC
of a change of circumstances five months ago and they are still
processing this change.
A client of Ballymena CAB is in receipt
of Income Support, DLA and CTC. The client has two daughters living
with her. The oldest is 17 and studying and the youngest is 13.
The client moved to a new house and applied for a Community Care
Grant as there is only one bed in the property and she needed
help with essential household items but this had been turned down.
The client's CTC payments had stopped for over a month and the
client did not know why. The client was also paying back an overpayment
from a previous year. The bureau contacted HMRC on the client's
behalf who confirmed the case was closed in error.
A client of Ballymena CAB called into
the bureau to say that he has never received the £85 he was
due in compensation from HMRC, any refund of the money he is owed
or any further correspondence regarding his case. In response
to a complaint from the bureau HMRC eventually replied 12 months
later in July 2006 saying they would fix the problem with the
client's case and send him compensation. It is now three months
later and the problem is still not fixed and compensation has
not been received by the client.
A client of Ballymena CAB has an ongoing
tax credit overpayment. A letter was sent by the bureau to HMRC
regarding the overpayment in April 2006. A call was received from
HMRC in relation to this case six months later to say that they
are still looking into the case. No written reply has yet been
received following letter of complaint.
A client of Carrickfergus CAB is married
with two children and has been in receipt of CTC of £40 per
month. She received a letter from HMRC stating they were advised
of a change in her circumstances and that she now owes HMRC £464.
The client contacted HMRC about this and advised that there has
been no change in her circumstances. Following this call she received
another letter from HMRC stating she had not responded to their
last letter. The client contacted them again by telephone and
confirmed that she had contacted them after the first letter and
advised again that there has been no change in her circumstances.
Another letter was then received stating she had not responded.
The client's husband then contacted HMRC and confirmed with the
staff member that his wife had made contact and that there was
no outstanding amount. Since then the client has received other
letters stating that she still owes £464 due to a change
of circumstances. The client wants to know what else she can do.
The client has called HMRC three times and it has been confirmed
that she has responded by telephone yet she continues to receive
letters about this.
A client of Armagh CAB called into the
bureau for help. She is single and has a two year old son in receipt
of DLA. She does not know how much benefit/tax credits she receives.
She has literacy problems and does not fully understand the letters
she receives. Although this client would have received information
from HMRC regarding changes of circumstances she has difficulties
with this due to her literacy problems. The bureau feels the system
is far too complex and bureaucratic and only serves to marginalise
further those in greatest need. This client is owed £2,900
as a result of not knowing to inform HMRC of her son's DLA award.
Derry CAB who was acting on behalf of
a tax credit claimant received two identical letters from HMRC
Customer Support Unit stating that they aim to send a full response
by June 2006 to a complaint made in October 2005.
A client of Antrim CAB is a single parent
with three children in receipt of Income Support, CTC and Child
Benefit. She receives Carer's Allowance for looking after her
son who receives middle rate care of DLA and has done for the
last three years. Her CTC stopped in April 2006 and when she contacted
the Helpline to enquire about this she was told that there had
been a computer error and that HMRC were trying to correct this.
Meanwhile the client received no CTC which caused her financial
hardship as she has financial commitments which she was struggling
to meet. In June 2006 the client began to receive a four weekly
payment of £189 but she did not know what this was or why
it was such a small amount when her normal payment had been much
more than this. The client came into the bureau for help with
this. Despite numerous contacts by the client to the Helpline
the mistake was not rectified until the bureau advocated on the
client's behalf. The client was on the verge of having to leave
her rented accommodation and was in considerable financial hardship.
After the bureau's intervention she will now receive £3,655
of arrears and her correct level of CTC from November 2006.
A client of Derry CAB has been informed
by HMRC that her second application form for tax credits has been
lost. The client contacted the Helpline about this and was told
not to fill in another form as this would mix up the computer.
However when the CAB adviser contacted the Helpline on the client's
behalf they were advised to make another application. The client
is living on approximately £140 per week and is in severe
financial hardship. This conflicting information is not acceptable.
A client of Newry CAB is a lone parent
with two children. She receives CTC, Incapacity Benefit, DLA and
an occupational pension. She receives free school meals due to
her entitlement to CTC. Her local Education and Library Board
have asked her to complete a renewal form for school meals and
she has been asked to send in her new tax credit award notice.
She has not received this and contacted HMRC who have said that
due to a technical error it cannot be printed. HMRC have said
they are unable to give her any documentation which states her
yearly income. The local Education and Library Board have confirmed
that without this confirmation her free school meals will stop.
A client of Ballymena CAB is aged 36
and works 31 hours per week earning approximately £10,000
gross per annum and she has one child. The client received a large
payment of over £1,700 of tax credits directly into her bank
account in May 2006. The client queried this immediately with
HMRC and was advised that due to an error her income was recorded
as £1,020 instead of £10,020 which has led to an overpayment.
The client was given contact details to send a cheque for the
amount of the overpayment so that her ongoing CTC and WTC payments
would not be affected. The cheque was cashed at the end of May
but the client then noticed a reduction in her tax credits awards.
The client made several calls to the Helpline and has been told
on several occasions to contact the Payments Helpline. The client
has been advised that her cheque was either never received or
was credited to the wrong account but no-one has ever taken responsibility
for resolving the issue. The client has received letters from
the Payments Helpline "to confirm the arrangement agreed
with you to pay the above amount of £1,766.40 monthly starting
on 23 May 2006." The reduction to her existing awards is
causing the client great difficulty with budgeting.
A client of Ballymena CAB came into the
bureau after checking her bank statements and confirming that
her last tax credit payment was made in August 2006 for £105
and no further payments have been made since then. Her Child Benefit
payments have also stopped around the same time. The client was
in distress and expressed concern that she could not afford to
pay her bills due to the irregularity of her tax credit payments.
A client of Ballymena CAB came into the
bureau for help with a number of overpayments. The client has
an overpayment for 2003-04 of £1151, for 2004-05 of £2,942
and for 2005-06 of £1,477. The client has never received
satisfactory explanations of how the overpayments came about.
The client has disputed overpayments but does not feel that the
response from HMRC provides any explanation or takes into account
any of the facts. The response from HMRC states that the overpayment
arose because the client's husband did not report his actual income
for 2003-04 until February 2005. The client did not know what
to do next. The bureau was able to establish that the overpayments
for two of the tax years were due to HMRC error. The bureau wished
to highlight that the explanations from HMRC do not fully explain
how overpayments arise and in this case the arguments put forward
by the client do not appear to have been considered and answered
A client of Central Belfast CAB is married
with 2 children. Her husband is employed and they are in receipt
of CTC and WTC. They have been told by HMRC that they have been
overpaid as they had been classed as being on Income Support.
The client pointed out that they could not be in receipt of WTC
and Income Support at the same time and the client has phoned
and written to HMRC repeatedly to inform them of the error. They
are now having an overpayment deducted from their tax credit payments
for six months and are suffering hardship as a result. This was
due to a HMRC error which the client tried to rectify and yet
now they are having an overpayment deducted from their award.
The bureau helped the client to register a formal complaint about
A client of Armagh CAB is married with
one child in receipt of CTC. In August 2006 she received 11 cheques
amounting to £2,200. She checked her entitlement to this
money on three occasions and was advised by HMRC that she was
entitled to it. She has now received a form to complete regarding
repayment of the overpayment.
A client of Ballymena CAB had a joint
claim for WTC and CTC with his wife in 2003-04 but they separated
in February 2004. The client notified HMRC of the separation but
payments did not stop until June 2004. The client received notices
to pay for £1,857 and £4,245 but it is not clear which
years they are for. The client wrote a letter of appeal to HMRC
but was informed there was no right of appeal. The client has
so far paid back approximately £900 of the overpayment. The
client came into the bureau to find out if there is any way of
challenging the overpayment. The bureau was able to confirm with
HMRC that there is a note on the computer system to confirm the
separation but that the change was not actioned and therefore
the client has been overpaid. Also the letters received from the
Debt Recovery Unit do not make it clear which year the overpayments
A client of Ballymena CAB brought in
her annual declaration to the bureau for help with completion.
The client has been working 33 hours per week since April 2006,
not 16 as stated on her annual review. All the other details were
correct. The client had her P60 showing her earnings for 2005-06.
During the course of the interview with the CAB adviser it became
apparent that the client's employer is still paying WTC to the
client through their wages. The client is also receiving WTC payments
directly into her bank account. Due to poor literacy levels the
client did not realise that the employer should no longer be paying
WTC and so now the client has been overpaid by her employer by
more than £3,000. The bureau feels that the tax credit system
is so complicated that neither the client nor the employer realised
the payments were being made in error.
A client of Down District CAB was employed
since October 2004. She works 19 hours a week and has been told
she is being made redundant and the business is to close in September
2006. The client has just recently got married and has two children
aged 12 and nine. The client informed HMRC of the change of circumstances
and she was sent new forms to complete. The client did not get
the forms sent back in time and her award stopped. She then returned
the forms and was told by the Helpline that because they had been
sent back within 30 days the claim would be OK. HMRC have paid
back some of the money owed to the client but she is still waiting
on the rest. In the meantime she has been told by a member of
staff from HMRC that she has an overpayment of £7,000. A
different member of staff has stated that the overpayment is £4,000
and she has also received a letter stating that the overpayment
amounts to £2,000. No-one within HMRC is able to explain
how the overpayment has occurred or why she has been given three
different amounts. The client has no idea how an overpayment could
have occurred in the first place as she is on a very low income
which has not changed.
A client of Antrim CAB called into the
bureau with a number of amended award notices. The client and
her husband had received a large number of these plus copies which
she could not understand. This couple is Polish and speaks little
English. They received up to six award notices plus copies as
an amended award when the information could possibly have been
put on two award notices at most. This was worrying for the client
and took a long time for the bureau to check through and reassure
A client of Newtownabbey CAB has not
received any tax credit payments for four weeks. The client contacted
the Helpline and was told there were three payments on the system
which would be sent out that week. The client called into her
local Enquiry Centre about these payments and was also told that
three payments had been sent out to her. The client still has
not received any payments.
A client of Ballymena CAB is married
with one child aged 15. The client works full time earning approximately
£23,000 per annum and his wife works part-time earning approximately
£8,400 per annum. The client has a tax credit overpayment
of £1,765 from 2003-04. The client has received an explanation
from his local Enquiry Centre that the overpayment occurred due
to an increase in income and his son was recorded as being in
receipt of DLA when he is not. The client's most recent provisional
award notice for 2006-07 also states his son is in receipt of
DLA. The client has phoned the Helpline and told staff at his
local Enquiry Centre that this is incorrect. HMRC failed to act
on the information given by the client that his son was not in
receipt of DLA despite the fact that the computer system clearly
shows the client reported the mistake in June 2003. Due to this
the client now faces a large overpayment.
A client of Ballymena CAB has received
a letter from HMRC stating an overpayment of £144. The client
could not understand how the overpayment had arisen. The letters
that advise clients they have been overpaid tax credits do not
explain how the overpayment occurred and this causes worry and
distress for clients. Clients then have to contact the Helpline
or come to an advice agency to get an explanation for this. The
bureau feels that if the original letter explained how the overpayment
occurred then unnecessary work would be avoided.
A client of Down District CAB is married
with two children. Both clients work and receive tax credits.
The client has been informed that she has an overpayment of £5,000
and she has no idea of how this could have arisen as she has always
informed HMRC of all changes of circumstances. She has tried to
contact the Tax Credits Helpline about this and has found the
advisers to be very unhelpful. The client has a number of award
notices and is completely confused and has filled in a form to
dispute the decision. This client has made a point of contacting
the Helpline each time her circumstances have changed in order
to avoid an overpayment.