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Being Harassed By HMRC Or A Debt Company For Repayment Of A Tax Credit Overpayment?

Paula21st November 2013

(Updated 15 July 2014)

Before our main article about HMRC harassment, (further below), many of you now seem to be getting identical and out-of-sequence demands recently. HMRC seem to be sending practically the same letter to anyone with an outstanding balance, regardless of whether there is an ongoing dispute or appeal. But it can be hard to tell with HMRC, because their letters are so disjointed and confusing.

Here is an example of what I am calling the ‘recent mass-demand letters’.

If the harassing letter that you are here to learn how to respond to looks like this, or you just feel that the following suggested response is more suitable in your situation than the others mentioned further down this page, please reply to the address on that letter to say something like…

‘I received your demand on x date. You are advised that this matter is under ongoing dispute and that HMRC have failed to respond to my previous letter. The demand infringes both HMRC obligations and my legal right to dispute the alleged overpayment. As such HMRC are misrepresenting their power to pursue recovery and your behaviour is therefore harassing and criminal. I demand a response to my previous letter.

Harassment

It’s now become very common for HMRC’s Tax Credit Office to try to push people into repayment while disputing, and even appealing. It did used to be fairly rare to be chased for recovery whilst challenging a Tax Credit overpayment debt. And it’s always been a grey area.

HMRC’s COP26 states that they will hold off recovery during the first round of disputing, which implies that they don’t have to hold off during further ones. But actually that is a legally dodgy position. People have several different rights offering access to disputing bills and debts etc. Until fairly recently it was just a theoretical issue, because HMRC didn’t actually try to chase recovery at any stage of dispute (except when being extra careless/useless).

While HMRC may have now decided to “stop suspending recovery while disputes are ongoing” it does not mean they legally can, or should. Thankfully we do have some laws that protect us and I am currently advising people to invoke debt and harassment laws when the Tax Credit Office, or the Debt Collection Agency that they’ve ‘sold’ your alleged debt to, start getting heavy on them about repayment. HMRC have a habit of not checking if their actions are legal, so it’s not actually surprising that they are breaking the law.

So, if HMRC or a Debt Collection Agency are pursuing you for repayment whilst you wait for responses to your appeals or disputes, please see the following steps:

Please note that usually you will have to send these letters as well as keep up to date with your appeal / dispute, as ‘recovery’ is usually handled by a different department to those that handle appeals/disputes.

If you are Appealing:

In fact, where you are appealing an overpaid award HMRC have absolutely no right to pursue you at all. My suggested response reflects that and so is very blunt and straight forward. Use the Appeal Harassment Complaint template.

If you are currently Disputing:

I feel that demanding repayment while people dispute constituents ‘harassment’, which is actually a criminal act. Basically I am now advising victims to threaten to make a criminal complaint of harassment. We haven’t actually got past the stage of just threatening yet, because so far we haven’t needed to.

To respond use either the HMRC dispute harassment template or the Debt Collector dispute harassment template depending of whether it is HMRC, or a debt firm chasing you on HMRC behalf.

Just complete the letter with your details, tweak the red text, and then get it sent in to the address the most recent demand came from.

(See here for more info on the difference between appeals and disputes)

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