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Child tax credit overpayment, Childminder not registered

 

Anne Higgins
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Welfare Rights Officer North Lanarkshire Council

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I have a Tax credit appeal coming up where a check was made in 2015 by HMRC on childcare and awarded.  In 2016 another check was made and it has been discovered that the child minder was using an old registration number and had not been registered since 2011.  My client is now being asked to repay over £7000.  She never knew the child minder was not registered as she had been provided with the registration number and had given it to HMRC and provided proof of payments.

In no way is my client at fault and the child minder has been taken to court and fined.  However on looking at Case law I’m shocked to read CTC/3532/2016.

Am I correct in thinking there is no way out of this other than the complaints and dispute rute

     
Jon (CHDCA)
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I think it can only be a dispute on recovery. In terms of “who met their responsibilities”, HMRC try to firmly push checking Ofsted registration onto the claimant. The claim form guidance notes refer you to leaflet WTC5, see page 5.

Any mileage in a private law action against the childcare provider? I think I’d signpost to a solicitor for an opinion on that.

     
ClairemHodgson
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Jon (CHDCA) - 11 August 2017 11:43 AM

Any mileage in a private law action against the childcare provider? I think I’d signpost to a solicitor for an opinion on that.

well there might, i suppose, be a claim in contract for misrepresentation etc (very long time since i’ve looked at contract law!) but some problems would be obvious
1. any such case is not within scope of legal aid, so client would have to pay
2. a solicitor is going to say, can the defendant pay? (both damages and costs).  the answer is likely to be, no - unless the defendant owns property in which there is equity over and above any mortgage secured on it
3. therefore no point taking the claim forward
4. plus if the overpayment turned out to be under £10K (since we can’t assume HMRC got their math correct) it would be a “small claim” and that means that costs of pursuing it can’t be recovered from defendant even if the case is won.

     
Jon (CHDCA)
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ClairemHodgson - 11 August 2017 01:24 PM

4. plus if the overpayment turned out to be under £10K (since we can’t assume HMRC got their math correct) it would be a “small claim” and that means that costs of pursuing it can’t be recovered from defendant even if the case is won.

The case in this thread is in Scotland, where I think the claim limits and costs are a bit different. But yes, agreed that a careful assessment would be needed of the chances of ever being paid, even on success in court.

The childcare provider here was prosecuted. I don’t suppose it would have been in the remit of the criminal court to grant (the Scottish equivalent of) a compensation order? One problem there is that the client is [I presume?] not actually the victim of the crime.

All in all, this seems grossly unfair on the claimant, I think I’d be taking a punt on a write-off request just on that basis if nothing else.

      [ Edited: 11 Aug 2017 at 02:04 pm by Jon (CHDCA) ]
Anne Higgins
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Welfare Rights Officer North Lanarkshire Council

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Thanks for that think I can only try and get Judge’s sympathy but that is quite a challenge with our Tribunal judges