A Cautionary Tax Credit Story – Innocent until Proven Guilty?

Mr E was issued a court summons on 1st December 2006.  He turned up in court on the appointed date, but HMRC failed to produce evidence and asked for an adjournment, which was granted.  Mr E had taken a day off work for nothing.  Just before he was due to appear in court again (27/3/07) he got a call from the Revenue explaining that they still had not got their facts together and would be asking the judge for a further adjournment.  The caller said that Mr E didn’t need to turn up in court the following week, for the Revenue would explain his absence to the judge.  Mr E chose to turn up, feeling rather surprised that the Revenue could just call and say the case would be adjourned without first consulting the judge – he was rather suspicious of this. 

On 27th March 2007 the Revenue explained to the judge why the previous hearing was adjourned, stating that they now had ‘facts’ and would be looking for a judgement.  Mr E complained to the judge that the Revenue had called asking him not to bother attending, whilst the Revenue dismissed this as waiting for documents which had only just arrived.  Mr E started to describe to the judge why the letter which HMRC had sent to his MP Mr Blunkett had all the facts wrong, which he was prepared to prove.  The judge stopped him, saying ‘let me explain to you.  I am sorry there is nothing I can do, the Revenue have produced the ‘certificate’.   Once this certificate is shown I will award judgement. The Revenue has produced this document today.  Nothing you have will make any difference whatsoever. I am sorry.’  It seems that a certificate served by the Revenue themselves ensured that the Revenue won, with no challenge possible by Mr E.

The moral of this story is that once the Revenue take a claimant to court, the claimant cannot win no matter what evidence they bring to court with them. Even a sympathetic judge is powerless to act. As Mr E says, ‘If the Revenue say you owe money, then you do, no matter what the actual facts are.  I have been mislead by the Revenue and the justice system. I will not pay what I/we do not owe. But now it seems the Revenue do not need a court order to 'seize goods' so going to prison is not even an option.  We are given 14 days to pay the full amount back. The whole system is corrupt beyond belief. The judge will not offer advice and is not expected to do so. The Revenue are beyond the normal rule of law.  Basically, if you do not win your internal Revenue appeal, you have lost. Nothing you can do about it, the court stuff is a cover, once they have the 'certificate' you have lost.  This was never made clear to us, although the judge implied we lost internal revenue 'appeals'.’

What makes this case particularly repugnant is that Mr E was never advised that being taken to court was purely to endorse his status as a debtor to the Revenue and to fix a date for full repayment, but saw this – as many claimants do, who would bring legal action themselves against their abusers, the Revenue, had they the means to do it – as his ‘day in court’ to clear his name, point out the Revenue’s mistakes, and have the overpayment recovery decision overturned.  He was never disabused of this very common misconception.  Had he known that the ‘debt’ would stick purely because the Revenue stated he owed them money, he would have done everything in his power to delay this court case and seek an independent judgement on his case elsewhere. He might even have looked to his friends and fellow tax credit victims from the Tax Credit Casualties user campaign group to start raising the necessary funds for a test-case defence.  Yet all these possible options were denied him.   Mr E thought that this was his opportunity, as a person without the financial means to bring a legal case of his own against the administrators of this flawed ‘benefit’, to put this matter to rest and have his overpayment written off.  He was not told that exhausting the Revenue’s internal dispute processes is not the end of all possible appeals.  He could, had he known, still have gone to the independent Adjudicator and the Ombudsman.  People like Mr E are being denied their rights, under Articles 6 and 7 of the Human Rights Act, to a fair trial, and to no punishment without law.  What is recovery of non-fault tax credit overpayments but a punishment for ordinary citizens for not understanding or not spotting all of HMRC’s continual mistakes?  Had Mr E had a chance to defend himself from this harsh recovery decision, he would gladly have gone on record in stating that the Revenue gave false information (‘lies’) to his MP regarding his earnings.  He was never given this opportunity. 

It is deeply worrying that claimants appear to forfeit all their human rights, and the Tax Credit Office all accountability for anything they do wrong, the moment they sign up for tax credits, especially since it has been found that half of all tax credit awards are actually wrong.  The onus is unfairly on claimants to spot and notify all errors they pick up on their tax credit award notices and in their payments, in addition to actual changes; they must also continually check with the Tax Credit Office that changes have been correctly recorded and promptly acted upon; they are strongly advised by welfare groups now to log and if possible record any calls they make to the Revenue, because HMRC seem incapable of correctly recording, acting upon and later retrieving these calls as evidence of the claimant’s integrity;  and if an overpayment is made, claimants have the responsibility of proving to the Revenue that their belief at the time that their award was right was ‘reasonable’. 

With the Revenue themselves deciding what is and is not ‘reasonable’ for a lay person who has no inside knowledge of the complexities and foibles of the system, and no prior warning of the extent to which they would subsequently be held liable for its failings, to understand, the current system is hugely stacked against claimants.  People are still not, despite the rhetoric and guidance, being advised of their rights to dispute overpayment recovery, and neither are they always advised of their right to take their unresolved dispute to the Adjudicator and Ombudsman, both of whom are independent of the Tax Credit Office and can take a more objective view.  Badly-informed people depend on the courts to review the evidence, and are taken by surprise to find that the verdict is, as with the Revenue’s internal ‘appeals’ system, predetermined against them. 

At the courts at the same day that Mr E attended his ‘trial’, were people defending themselves against criminal charges.  Whilst each of these people quite rightly had access to good legal representation, and were presumed ‘innocent until proven guilty’ (please note the different and completely inconsistent burden of proof), Mr E was denied access even to self-representation. 

Since Mr E had no access before his ‘trial’ to an independent review of the facts of his case, and the misrepresentations HMRC had made about the ‘facts’ of his case were never scrutinized and found to be false, he has no option but to conclude that a Customer Support Manager at the Tax Credit Support Unit at Preston, whom we are able to name, ‘is telling lies to my MP’.  Mr E strongly believes that this manager ‘made this up to gain the ‘certificate’ in order to gain judgment against us.’

How can the Paymaster General Dawn Primarolo maintain to many of her increasingly sceptical back-benchers that there are enough safeguards in the tax credit system at the moment to ensure that Article 6 is not breached, when travesties of justice such as this are allowed, if not encouraged, to occur every day?

Readers Digest on why the Tax Man is above the law 1

Readers Digest on why the Tax Man is above the law 2

Please note that we are not tax professionals and are working on a voluntary basis, unpaid, in our ‘free time’. Between us, we have a lot of experience and knowledge in this area, gained over the last few years of supporting victims and helping them fight for justice and their rights. But legislation, operating practice and individual cases change all the time. While we aim to be professional and accurate at all times, please understand the circumstances we are working under, and accept our support, guidance and information in the sprit it is offered; goodwill and camaraderie.

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