Graham9th April 2010
Over the years, HMRC have always stated that they will consider any hardship issues caused by the repayment of Tax Credit overpayments. Different issues of the COP26 comic have mentioned it in different ways. The current version of COP26 actually mentions the word twice, without actually saying anything helpful.
But here’s a question, and hopefully someone will e-mail us with an answer … has anyone, anywhere in the UK, ever had their Tax Credit overpayment written-off because of hardship?
You see, the only things that ‘HMRC’ and ‘hardship’ have in common is that they both start with the same letter and you don’t want either of them in your life! There must be laughter all the way from 11, Downing Street to the very depths of the Tax Credit Office, ( Ha! Ha! They fell for the old hardship joke … write-off?? Ha! … )
Let’s imagine that you had claimed Tax Credits, filled in all the forms correctly and fulfilled all of your obligations to check that HMRC were calculating your claim exactly right. I know we shouldn’t have to check their work (but it’s only reasonable, y’know)!
Then add in a known computer fault that fooled the Tax Credit system into thinking that your income was actually zero. (Yes, we know that people don’t work 40 hours a week for nothing, but they’ll get the maximum award and be happy about it). Hey, this is getting to be fun … but lets make it even wilder! (Let’s make the forms that are sent to claimants show that everything’s right and correct. We’ll HIDE the zero income bit, and fool all of the claimants. Let’s just show that their income was recorded as zero AFTER they’ve had all of their Tax Credits paid for the year).
Which is exactly what happened to one of our members. I’m sure that it’s happened to others too. The zeroing of income figures was a known software fault, but instead of doing the right thing by coming clean with everyone affected by it, HMRC screwed claimants for the repayment.
That overpayment should have been written-off straight away, because HMRC actually admitted zeroing his income after they were pulled up about it! They decided that he should have noticed, so had to repay, even though the zero income was only shown on the end of year summary.
His dispute went as far as The Adjudicator, who awarded him £60 compensation because HMRC made a mistake, but then ruled that he still had to repay the overpayment. By the way, did you know that The Adjudicator is appointed by HMRC? Independent and impartial? Hmm …
So where does the ‘hardship’ angle come into it? Well, our member submitted a hardship form to HMRC and hasn’t heard anything back. Is the hardship claim valid? When HMRC decide that you have to pay 102 monthly payments of £65.46 and a final payment of £113.49, (8 years and 7 months), even the Tax Credit Office tea boy would suspect that there’s something up! And these repayments are, quote, “unbelivably crippling and make me feel like a criminal“.
An isolated case? Not on your nellie!
Remember this one from our October 2009 Newsletter? Quote,”Owing to overpayment of tax credits, despite the relevant department having been given all the facts, I have today received a payment plan from HMRC demanding £10.09 a month for the next 50 years. Oh, and a final payment of £1.23 on 30/11/2059“.
That’s another overpayment caused by HMRC not acting on information they had been given, and a 50 year repayment plan!! No injustice or hardship there then!
What’s YOUR story?
Hardship upon injustice, injustice upon hardship. Labour have a lot to answer for by not addressing the Tax Credit overpayment debacle. Hopefully to charges of something like Corporate Negligence.
Tax Credits: Designed by an idiot, implemented by morons, managed by incompetents and defended by the whole lot of them.
Comment by Alison at 7:35 am on 10th April 2010
I, too, was a victim of the zero salary scandal, and because of how HMRC applied the “reasonable belief” test, I was similarly stung for an overpayment of £6500 which I received just before Christmas. I approached my New Labour MP for help, as at the time I was unaware of my rights, HMRC told me “you cannot appeal” and the Tax Credit Casualties website was in its infancy. My MP was as good as useless; despite sitting on the Public Accounts Committee (and later describing my case to them as “a catalogue of errors”) she was quite happy to trot out to my HMRC’s explanation that my overpayment had arisen since one year I had a salary which they quoted as double what I was actually getting, and the next, zero for a 37 hour week. Well, I know social care doesn’t pay well, but it isn’t THAT bad!
Fortunately, in first finding, then joining Tax Credit casualties (TCC) as a founding member, I discovered that things weren’t ever as they seemed in the tax credit “system” (I use that word loosely). Claimants might not be able to APPEAL (since HMRC used that word just to describe the process of challenging the amount you were originally awarded, ie. whether you should get anything and how much), but I could DISPUTE recovery of the overpayment – which I did. Secondly, HMRC’s “reasonableness test” was anything but. HMRC very quickly admitted that they made mistakes – even multiple mistakes. Great, you might think: New Labour has always maintained that HMRC won’t recover official errors. Alas, they lie – they do. I also quickly found that, in the Treasury and New Labour’s eyes, it was no defence to say – quite honestly – that I’d spent my award in good faith on exactly what it was intended for – to support my family. Not only, under this “reasonableness test” or “reasonable belief” rule, did I have to have believed my award was right, but that belief would have to be considered “reasonable”.
So what constitutes a “reasonable belief”? It’s not enough, apparently, to believe Gordon Brown’s promises that “Money with your name on it” was going to be a properly calculated, irreversable helping hand to supllement lower-than-average pay. It wasn’t reasonable to believe that to be my correct entitlement, not a loan by New Labour. The cynical among us might say that they knew they couldn’t manage an economy and were relying on recovery of Tax Credit Loans for an income when the going got hard. But I digress.
It wasn’t reasonable, either, in HMRC’s view (as they act as judge, jury and executioner, and nothing about the dispute process, as Graham has described, is actually “impartial”) for me to presuppose that, on telling them my correct salary, I hadn’t conceived the possibility that they would treat it as zero, when HMRC were already taxing me on it.
Nor was it reasonable of me not to have suspected that when they put my correct salary on the front of the form, what they were actually applying their complex calculations to wasn’t my real salary, but my zero salary from HMRC’s alternate reality where people work in skilled jobs for a 37 hour week for zero.
The last shock I will describe here (actually, I could list a lot more)was that the onus was on ME to prove I was honest, compliant and reasonable rather than on HMRC to prove otherwise. Doesn’t the UK apply, in criminal law, the “innocent until proven guilty” clause? Why not then when dealing with tax credit issues? Are tax credit claimants less worthy of justice than suspects of crime?
From the way this government talks of “CLAIMANT error and fraud”, it is clear who they blame for all of this. Yes, there are claimants who deceive and lie, make up children they don’t have, and give false details. Yes, claimants can fill out the complex forms wrong. But the government asks HMRC for no quantitative data on which errors are claimant-caused and which are the result of HMRC mistakes. Neither do they do so with fraud, and we have “insider” allied who tell us HMRC has been, and probably still is, rife with internal fraud. And would we trust them if they did compile a list of whose fault the overpayments were? After all, you are talking about an omnipotent, unaccountable organisation which, until a recent test case, couldn’t even be taken to court. One which acts as judge and jury in its own cause. One which has destroyed innocent people. One which potential whistleblowers will not publicly divulge anything much about for fear of – their jobs or possibly worse.
In my case, I fought hard to prove I was not only honest but genuinely deluded by HMRC, and with the help of repeated data requests, I finally overcame the barrier of HMRC losing/deliberately withholding key information which incriminated them, and won my case. When I first got this hefty bill, I felt virtually suicidal. I was depressed for months, and my family, relationships and no doubt work suffered. Was it really “in the public interest” for HMRC, with the blessing of this governemt, to spend probably more than the amount of the original overpayment in writing court threat letters to me, and alternately harrassing, ignoring and lying to me for about four years until the overpayment was written off? What about the emotional costs, the days lost at work with stonking migraines? What about families who go under with the pressure? In the course of my TCC work, over the last five years, God knows I have seen dozens of families decimated by Brown’s “Flagship” system.
But eventually I got angry. And best of all – better even than victory – was the revelation I got into the way the Labour party works.
I won’t bore you with that now. Suffice it to say, I will not be voting Labour again for a long, long time.
Thank you Mr Brown for opening my eyes to the true contents of that glossily packaged New Labour tin.
And I pray to God you don’t get back in.
Comment by Tina McArthur at 11:31 am on 23rd September 2011
Hi – I’ve just stumbled upon this website but wish I had done years ago. I’ve been (and still going through a similar experience)
I filled in all the forms in 2003 but fell foul of the ‘zero salary’ issue. I argued and argued but they kept insisting that even though the cause was ‘human error’ on their side – it was still my responsibility to check the figures. So they slapped me with a CCJ…5 years into the CCJ (one year left of bad credit!) I receive a letter yesterday (Suspended Attachment of Earnings) from the Court telling me I have to start payign the overpayment back over 2.5 years – so now I will have bad credit for another 2.5 years! Brilliant!!
I haven’t been able to get a mortgage or anythign for the last 5 years due to their error – which they admitted on the phone to me but I don’t have in writing. I have requested all my data and calls so it will be interesting to see what I get sent. I felt like i was goin mad so am so relieved to read on here that it’s been a common error.
I also feel somewhat suicidal – this has dragged on for 8 years and they still are chasing the money. Out of principal and because it was their fault I have always resisted the repayments but now…what’s the point? They’ve ruined my life for the past 8 years…I give up!!!