Been feeling rather self-satisfied that in all my years doing Welfare Rights I have avoided anything other than a cursory involvement with Tax Credits. Now a colleague from a different dept has asked for help with an o/p and I would be grateful for any pointers. Overpayment comes to about £6,700 for years 2003/4 and 2004/5. The facts/dates are:

Before August 2003 claim was for a couple with children, one wage of about £19,000.

August 03 partner also starts work, joints wages of approx £37,000. He contacts TCO to inform them of increase in wages and that childcare costs had decreased. TCO assures him this would be taken into account. He can't remember what happened to his TCs at the time - may have been some irregularity in the payments which he assumed was due to the new income taken into account.

August 04 they receive renewal (?) papers from TCO which showed just one wage and unchanged childcare costs.He rings to point this out and confirms the correct information in the form returned to TCO. Tax Credits go down from September (but seemingly not by enough in retrospect) but he assumes all the relevant info must have been taken into account.

Sept 04 he rings TCO to inform them of impending relationship breakdown and bank details change so that partner receives TCs.

December 04 they separate. May 05 first letter from TCO about the o/p.

May 05 onwards, copious correspondence/phone calls between him and TCO, different o/p figures appearing, long gaps in answering his letters etc which are probably not strictly relevant to any defence he may or may not have but add to the feeling of chaos and confusion for him.

He has contacted me late in the day (court action has now been threatened) and will be seeing his MP this weekend. I've not had the time or info to check if the TC calcs are correct or not. He has received recordings and records of about 4 phone calls to the TCO but not all of them and crucially, not the one in August 03. He also hasn't got any of the TC award notices which TCO claim showed the wrong wage figurealthough most of them were dated after the end period of the o/p (Dec 04) so wouldn't be relevant to what he should have known at the time.

My initial advice has been for him to ask the M.P. to make representations on his behalf about writing off/reducing the o/p or at least delaying taking further action, based on the dog's breakfast the TCO has made of the claim/o/p.

I assume if we need to develop any more focussed arguments, then even if TCO accept the phone call of Aug 03 was made they will argue he should have known he was being overpaid. Counter-arguments would have to rely on info included in any award notices received, and changes to TCs actually received at the time. And this presupposes we aren't too late to raise these issues now anyway (unfortunately a lot of the points raised in previous correspondence were red herrings relating to the relationship breakdown).

One final point. In one of their explanation letters, the TCO state they were aware of the correct income info in Sept 04 and this was included in an award notice. TCs did go down in Sept 04. Subsequent letters from TCO state they didn't have the info until much later. Might at least be possible to argue that the o/p from Sept 04 to Dec 04 should not be recovered? He has asked them to send copies of all relevant award notices.

Apologies for the length of this and hope it makes some sense. If there are obvious things that would/should have happened for this period that I have missed then please let me know. I will be on leave for the next week so if anyone is kind enough to reply any lack of response from me will be down to this.

Thank you.

Hi

Under the new COP 26 test, if a claimant has reported a change to HMRC and HMRC have failed to act (which caused the overpayment) then it should be remitted.

However, it is likely that some overpayment will remain due to the annual nature of the system because they were paid between April and August 2003 on an income of £19,000 and so by reporting an income of £37,000 in August even if TCO acted there would most likely have been an overpayment anyway.

However, any overpayment after that date should come under the COP 26 part above.

I imagine the TCO will say they can't find a phone call. If this is the case, then you should explain to them that it has been acknowledged via a parliamentary question that not all phone calls between Jan 2003 and September 2004 were recorded.

The minutes from the consultation group in December 2008 state in relation to calls missing during this period:

'For calls made in this period where there is no record held, the claimant should be given the benefit of the doubt and staff dealing with disputes are aware of this.'

(taken from the minutes of the TCCG group available online here http://www.hmrc.gov.uk/taxcredits/minutes041208.htm)

The quickest course of action would probably be for you to write a dispute letter using this information, and ask his MP to forward the letter to TCO asap. That should get recovery action stopped while they consider it.

I have seen cases where TCO state that the claimant should have known they would receive a new award notice, and shoudl have told HMRC if they didn't. My argument on that as the system was new, he may not have realised and given the unstable nature of his payments he wouldn't have realised anything was wrong.

Good luck!
Victoria

(LITRG)