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Forum Home  →  Discussion  →  Other benefit issues  →  Thread

Tax Credits Debt Recovery

Wensleyfoss
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Welfare Rights Advisor, Autism Anglia

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Total Posts: 61

Joined: 10 June 2015

Has anyone else come across a debt agency recovering overpayments of TC?
An appeal has been in since March, last week a text was received to say there was a backlog. Two days later a letter was received from LCS debt collecting agency.
I called HMRC today, who say that all appeals are sent to the debt agency. The client sets up a repayment plan, if the appeal is successful all funds will be paid back. It fell on deaf ears when I pointed out that they are not allowing a proper appeal process.
This will have an effect on a person’s credit rating.

LITRG
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Low Incomes Tax Reform Group

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Joined: 16 June 2010

Wensleyfoss - 13 June 2022 01:51 PM

Has anyone else come across a debt agency recovering overpayments of TC?
An appeal has been in since March, last week a text was received to say there was a backlog. Two days later a letter was received from LCS debt collecting agency.
I called HMRC today, who say that all appeals are sent to the debt agency. The client sets up a repayment plan, if the appeal is successful all funds will be paid back. It fell on deaf ears when I pointed out that they are not allowing a proper appeal process.
This will have an effect on a person’s credit rating.

This won’t affect the person’s credit rating. The debt is not transferred to the debt collection agency, they just act on behalf of HMRC.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1067031/COP26_online.pdf Page 1 confirms the policy that debt recovery should be suspended during a MR or appeal. However our understanding of that is that it assumes the debt is related to the appeal. Is it possible this is an old debt unconnected to the appeal that is being recovered?

I would suggest contacting HMRC again and pointing out that guidance. If they still say they have to continue recovery, and the debt is linked to the issue under appeal, then we could raise it as an issue with HMRC at the next tax credit consultation forum. You can email us at .(JavaScript must be enabled to view this email address)

 

Wensleyfoss
forum member

Welfare Rights Advisor, Autism Anglia

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Total Posts: 61

Joined: 10 June 2015

Thanks, there is no previous debt or any outstanding debt. I will email you if that is oK?

LITRG
forum member

Low Incomes Tax Reform Group

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Total Posts: 107

Joined: 16 June 2010

Wensleyfoss - 13 June 2022 03:10 PM

Thanks, there is no previous debt or any outstanding debt. I will email you if that is oK?

yes sure - we can raise it via the TCCF