This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/money/2016/nov/30/tax-credit-harassment-a-massive-headache-and-real-worry
The article has changed 4 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| Families on tax-credit harassment: 'a massive headache and real worry' Families on tax-credit harassment: 'a massive headache and real worry' | |
| (7 days later) | |
| Since its introduction in 2003, the tax-credit system has been plagued with problems. For more than a decade, HM Revenue & Customs has struggled to respond swiftly to families’ changing circumstances, resulting in hundreds of thousands of people unwittingly owing money after being overpaid working tax credit and child tax credit. In the year to June 2016, Citizens Advice helped people with 40,000 issues relating to tax credit overpayments, a 6% increase on the previous year. | Since its introduction in 2003, the tax-credit system has been plagued with problems. For more than a decade, HM Revenue & Customs has struggled to respond swiftly to families’ changing circumstances, resulting in hundreds of thousands of people unwittingly owing money after being overpaid working tax credit and child tax credit. In the year to June 2016, Citizens Advice helped people with 40,000 issues relating to tax credit overpayments, a 6% increase on the previous year. |
| In 2014, it was reported that the government was pursuing more than 4.7m cases of overpaid tax credits, amounting to total debts of £1.6bn, and using debt collectors to do so. Since then, it seems to have continued to take a heavy-handed approach. In the past year, Citizens Advice has seen a 32% increase in the number of issues related to the recovery of tax-credit overpayments, including the involvement of debt collectors. In some cases, debt-collection agencies hold inaccurate information from HMRC and are chasing money from individuals who already been making payments via direct debit. | In 2014, it was reported that the government was pursuing more than 4.7m cases of overpaid tax credits, amounting to total debts of £1.6bn, and using debt collectors to do so. Since then, it seems to have continued to take a heavy-handed approach. In the past year, Citizens Advice has seen a 32% increase in the number of issues related to the recovery of tax-credit overpayments, including the involvement of debt collectors. In some cases, debt-collection agencies hold inaccurate information from HMRC and are chasing money from individuals who already been making payments via direct debit. |
| Anna Mee, 38, from Leicestershire spent hours on the phone trying to find out why she was being chased by a debt collector when she had been paying a direct debit to HMRC for more than a year, to clear overpayments in working tax credit and child tax credit. | Anna Mee, 38, from Leicestershire spent hours on the phone trying to find out why she was being chased by a debt collector when she had been paying a direct debit to HMRC for more than a year, to clear overpayments in working tax credit and child tax credit. |
| The mother of three, who works in catering, said: “In the tax year 2014-15 I started the year as a single mum, unemployed. Then I became self-employed and then employed with my partner moving in. I told HMRC of every change but I still ended up with a £1,600 overpayment.” | The mother of three, who works in catering, said: “In the tax year 2014-15 I started the year as a single mum, unemployed. Then I became self-employed and then employed with my partner moving in. I told HMRC of every change but I still ended up with a £1,600 overpayment.” |
| Once she was informed that she owed money, Mee cleared £800 straight away and set up a direct-debit payment to clear the rest. She had been paying £20 a month by direct debit for a year when she received a letter from HMRC saying £600 was due outright. “I freaked out. I rang up, told them about the direct debit and they said to treat the letter like a statement and to ignore it, so I did.” | Once she was informed that she owed money, Mee cleared £800 straight away and set up a direct-debit payment to clear the rest. She had been paying £20 a month by direct debit for a year when she received a letter from HMRC saying £600 was due outright. “I freaked out. I rang up, told them about the direct debit and they said to treat the letter like a statement and to ignore it, so I did.” |
| Mee then received a second letter from HMRC asking her to clear the £600 balance and treated it as a statement too, as she had been advised to. “Months later, I got a letter out of the blue from a debt-collection agency rather than HMRC. I was really upset.” Mee didn’t want to ring the debt collector because she feared that meant she would be accepting responsibility for the debt. | Mee then received a second letter from HMRC asking her to clear the £600 balance and treated it as a statement too, as she had been advised to. “Months later, I got a letter out of the blue from a debt-collection agency rather than HMRC. I was really upset.” Mee didn’t want to ring the debt collector because she feared that meant she would be accepting responsibility for the debt. |
| “I contacted HMRC and after lots of faffing around they said it was linked with the overpayment. They told me to ring the debt collector to explain. I was really unhappy about doing this so I got on to managers at HMRC and eventually they told me to quote a reference number to the debt collector. They said it was happening a lot recently,” she said. | “I contacted HMRC and after lots of faffing around they said it was linked with the overpayment. They told me to ring the debt collector to explain. I was really unhappy about doing this so I got on to managers at HMRC and eventually they told me to quote a reference number to the debt collector. They said it was happening a lot recently,” she said. |
| Mee reluctantly contacted the debt-collection agency and was immediately asked if the debt was related to HMRC, before being asked for a reference number. “It seemed like it was an automated process, like this sort of thing happens all the time. They took the reference number and said ‘that’s fine’. I haven’t heard anything since,” she says. “It was a massive headache and a real worry for something that wasn’t my fault in the first place, and I was the one who had to sort it all out.” | Mee reluctantly contacted the debt-collection agency and was immediately asked if the debt was related to HMRC, before being asked for a reference number. “It seemed like it was an automated process, like this sort of thing happens all the time. They took the reference number and said ‘that’s fine’. I haven’t heard anything since,” she says. “It was a massive headache and a real worry for something that wasn’t my fault in the first place, and I was the one who had to sort it all out.” |
| The Credit Services Association, the UK trade body for debt-collection firms, told Guardian Money it was unable to comment as it was a matter for HMRC. | The Credit Services Association, the UK trade body for debt-collection firms, told Guardian Money it was unable to comment as it was a matter for HMRC. |
| Labour MP Frank Field, chair of the work and pensions select committee, said the government needed to act immediately to rectify the errors that had triggered the overpayments. | Labour MP Frank Field, chair of the work and pensions select committee, said the government needed to act immediately to rectify the errors that had triggered the overpayments. |
| “Following the nightmare situations they’ve been put through by Concentrix [the US firm formerly hired to handle claims], and now the hounding they’ve received from debt collectors, it’s as though thousands of hard-up families can claim tax credits only once they’ve been put through a menacing obstacle course by HMRC,” Field told the Guardian. | “Following the nightmare situations they’ve been put through by Concentrix [the US firm formerly hired to handle claims], and now the hounding they’ve received from debt collectors, it’s as though thousands of hard-up families can claim tax credits only once they’ve been put through a menacing obstacle course by HMRC,” Field told the Guardian. |
| “Having acted swiftly to remove the Concentrix-shaped obstacle from the course, those families will now wish to see the government act immediately to rectify those errors that have triggered overpayments, and to ease off on the use of debt collectors. Such action is necessary if the prime minister’s pledge to protect Britain’s vulnerable underbelly is to be fulfilled.” | “Having acted swiftly to remove the Concentrix-shaped obstacle from the course, those families will now wish to see the government act immediately to rectify those errors that have triggered overpayments, and to ease off on the use of debt collectors. Such action is necessary if the prime minister’s pledge to protect Britain’s vulnerable underbelly is to be fulfilled.” |
| HMRC said that in a small number of cases a debt-collection agency may contact a claimant who already has a payment arrangement with HMRC. In such instances, HMRC will instruct the debt-collection agency to return the case immediately. It would not say how it expected to find out if an agency had contacted a claimant. | HMRC said that in a small number of cases a debt-collection agency may contact a claimant who already has a payment arrangement with HMRC. In such instances, HMRC will instruct the debt-collection agency to return the case immediately. It would not say how it expected to find out if an agency had contacted a claimant. |
| An HMRC spokesman said: “We work hard to ensure claimants receive the right tax-credits payments, but where an overpayment has been made on a claim, it’s only fair that the claimant pays that money back. We understand that not everyone can pay this back straightaway, and anyone who is worried that they will have difficulty repaying that money should contact us as soon as possible and we’ll explain the options available. When we let a customer down, we always apologise and put matters right.” | An HMRC spokesman said: “We work hard to ensure claimants receive the right tax-credits payments, but where an overpayment has been made on a claim, it’s only fair that the claimant pays that money back. We understand that not everyone can pay this back straightaway, and anyone who is worried that they will have difficulty repaying that money should contact us as soon as possible and we’ll explain the options available. When we let a customer down, we always apologise and put matters right.” |