Tax Credits

[pudseyb]

Does anyone know if there is a time limit for recovering overpaid tax credits.
Completely out of the blue a friend has just been asked to pay back nearly £2600 for tax years 2004/05 and 2005/06 and he has asked me to look into it as a semi retired accountant.
How can anyone check back on what their income was nearly 10 years ago is beyond me.

[boxtops]

It's not difficult to check previous years' incomes - your friend can look at his correspondence from the tax office for those years to show what his gross income was, and also the net income would be showing on his bank statements (it's easy to get copies of those, as I am sure you know).

You need to google the HMRC site re time limits, but they can go back beyond 7 years according to this. http://forums.moneysavingexpert.com/showthread.php?t=4565431

HMRC appear to be quite within their rights.

[Sycamore3House]

I had to repay after 5 years. The Tax Credits were paid in error. I had kept the money in a separate account as I knew they were paid in error. At the time when I received them I had a large pay increase and was no longer eligible on the renewal form it stated if your circumstances have changed do nothing. I did nothing & they still paid them. I think at the time a lot of people were overpaid this case sounds about the same time as mine.

[boxtops]

Good point, methyl - I regularly get scam emails allegedly from HMRC, which go straight in the bin.

[pudseyb]

Since writing I have sourced info I need so many thanks to contributors for input.
This is a Scottish alleged debt case and 20 years limit applies up here...alas!!!

[buildersmate]

There is a Code of Practice 26 published by HMRC that outlines the rules by which this works. Claimants for tax credits have an obligation to advise HMRC when their circumstances change. If the overpayment has occurred because the claimant failed to do that, I do not believe the 6 year limit of statute applies. If HMRC made a mistake in calculating the payment figure, and the claimant provided correct information, that may be different.
How a semi-retired accountant can made the statement in your last sentence is beyond me.

[Peter Pedant]

BM dont be so rude -he could be a turf accountant !

My own guess was, as we are never given the full facts but only a thrumb nail, that they had found summit in the last 6 y and that allows them to trawl back to the day of creation itself.

[themas]

PP - I doubt whether you are right. An awful lot of these Tax Credit overpayment cases do go back for years - probably to do with lack of resources to deal with them in a timely manner!

However, I know that because of the delays a lot of money was written off by the Tax Credit people so it is always worth querying and complaining.

I believe that in England the Statute of Limitations should apply to these debts so - unless a County Court Judgement has been obtained - they could not be enforced in Court if no payment or acknowledgement of the debt has been made in the last 6 years. This does not in itself result in the debt being written off but if it cannot be enforced & the debtor can't or won't pay there is little the creditor can do. If the same tax credit award is still in payment the debt can still be collected by deduction from it. There is no time limit on this so far as I am aware.