Mind boggled by tax credit system?

Question

I have been asked to attend hmrc offices for a tape recorded interview about a matter relating to tax credits. They wont tell me what its about but only that they view it as serious. The only two things that could be wrong are i didnt declare my partner moving in with me in 05 as i was in great financial difficulty and maybe that my estimated income was lower than what i actually earned but i thought there was a threshold of 2,500. Does anyone know what will happen to me, will i be prosecuted, if so i will most definately lose my job which in turn i could potentially lose my house as i will not be able to pay my mortgage. I have a reasonable excuse for not declaring my partner at the time (although they will probably not see it as reasonable) and as regards the income side of it, the whole system has confused me since day 1. I have never understood the award notices (sometimes you receive 3 at a time) they vary and to be honest i just bung them in a drawer and assume its right.

To the Char: i am a tax payer, i work full time and have done since i left school. I only never informed them of my partner moving in cos i genuinely couldnt afford at the time to lose the extra money, i got myself into a situation of financial difficulty and the intention was to get on my feet and then let them know he moved in and get right on the money.

Answer 1

Hi Muppet. I'd like to tell you not to worry but I don't suppose you will stop, will you?

I can't answer your question as no-one here knows what HMRC intend to do. In fact, they have probably not decided yet until they hear your answers. Here are just a few things to remember.

I agree with the other answers I have read that they are likely to home in on the unreported change of circumstances rather than the increase in income. You are right in that there was a threshhold for increases of £2,500 (increased last year to £25,000). If the increase was less than this then you are not in the wrong, although you may have to repay some benefit.

Right, on to the meeting. Points to remember -

Firstly, you are entitled to have someone with you if you wish.

Do not chatter with the person taking you to the interview room, especially if that is the person who will be conducting the interview.

Once you are settled listen very carefully to what they say at the beginning. They will obviously repeat that the interview will be recorded. They may also issue you with a caution. The caution will tell you that your statements may be used in any criminal proceedings against you. If you are not clear about what they have said ask them outright if the interview is being conducted under caution.

Ask at the outset for a copy of the recording or a transcript of the interview to be made available to you later.

If the interview is under caution then be extra careful about what you say. Although it is not certain it does mean they have at least considered the possibility of prosecuting you.

Think before you answer! There is no time limit to giving answers. You must make sure that you (a) understand the question, and (b) give a truthful answer.

If you are not sure what is meant by any question then ask for a further explanation. This is not being unhelpful and it will simplify things in the long run.

Do not guess! This is most important. You will naturally want to get the interview over with as soon as possible but you must not give them incorrect details. It is perfectlly OK for you to say that you don't know, or can't remember. Say that if it is the truth. Particularly with dates and amounts. If you are estimating be sure to make that clear but my prime advice would be not to estimate anything.

Answer the question asked. Do not ramble on with irrelevant details.

Keep calm. If you feel yourself starting to panic ask if the meeting can be adjourned for a short while.

Remember the interviewer is only trying to ascertain the truth but also keep in mind that he is not on your side! Whilst you will not be asked any deliberate trick questions the same thing is sometimes asked a number of times in different ways to see if your answers are the same.

I have never had an enquiry about tax credits but have attended a number of interviews regarding income tax. If you wish to e-mail me about this please feel free.

Answer 2

Hello,

(ANS) The answer is difficult but I'll have a go here for you, First off the governments income tax credit system was designed to help specifically families & children. Its was originally one of Gordon Browns schemes to encourage people back into paid employment.

Secondly, the scheme is dreadfully complex & terribly beaurocratic in nature, even very intelligent (no disrespect!!) people have been completely stumped by it. Its worse than the ordinary benefit system for sure.

Thirdly, the way I understand how the tax credit system works is that a) if your income falls then the tax credit system kicks in and your income is boosted by the system making a calculation about how much tax credit you should receive. b) however, the opposite is also true. If your income suddenly changes & jumps up. Then your supposed to tell the tax credit system and your payments are reduced or stopped accordingly.

However, if your income jumped up due to a new job and you failed to declare this fact. Then the tax credit system would have in effect made an over payment to you. In this type of situation the tax credit system would come back to you and ask you to repay the over payment's even if you perceive that it was their fault NOT yours.

**There has been a massive amount of financial fraud identified recently and the government is trying to crack down upon this, this may be a part of why your facing an interview.

**They could argue that your attempted to defraud the income tax credit system because you failed to notify them of a change of circumstance.

**Its a difficult situation & I think its a VERY Grey area. I would advise you to get some legal help if you can BEFORE the face to face interview. The C.A.B are very good on things like this as they deal with lots of cases like this all the time.

**Perhaps you might just get a telling off & asked to pay the over payments back, but the most extreme would be a prosecution for defrauding the system.

Best Regards IR

Answer 3

Tell them the truth and offer to repay it. Why would you lose your job if you were prosecuted? Get together all the paperwork you can find to support your claims of financial difficulty and the incomprehensible paperwork and go to see the Citizens Advice Bureau or a solicitor. Ask if someone from the CAB or solicitor can accompany you to the interview.

p.s. I know what you mean about the rubbish paperwork they send out - every year since it was introduced I have received pieces of paper telling me I am "entitled to Child Tax Credit of £0.00 but it has been reduced to £0 because of my income. This calculation is based on the fact you have a child under 16 who was born in 1985". Said child will be 22 in July.

Answer 4

I noticed how you forgot to include Jimmy Carter in your argument. When only the "rich" pay most of the taxes, when you give a tax cut on federal income taxes, you usually don't affect people who pay little or no federal income taxes. There are arguments that FDR's policies actually pro-longed the Great Depression; WW II effectively ended the Depression, not FDR's big-government policies. You put too much emphasis on Presidents' influence and affect on the American economy. Their are thousands of external variables that you are not considering. You also don't factor in the increases in productivity that have been the real driver of prosperity, economic growth, and a higher standard of living in the United States. If centralized planning, government spending is the path to prosperity, then why are so many of the European, Socialized countries struggling? Why has Socialism been proven to be an absolute failure just about everywhere it's been implemented?

Answer 5

ivan r got it just about spot on. my advice to anyone is to declare everything, ignore the waiver limits as it doesnt really work out like you think it will and normally ends up in some kind of overpayment.

if you have been interviewed about your partner moving in this will have caused an overpayment and at the very least they will ask you to pay it back.

remember that they have access to every other government computer system in the country so can find out very easily if you have told them wrong dates etc.

the only way out of this is to work with them to solve it, ask them what you need to do to put it right, they are only protecting the taxpayers money at the end of the day and if you repay what you were not entitled to, you might just not get into too much trouble and lose your job over it.

Answer 6

It sounds like you have been found out regarding your partner. If it was an overpayment due to your earnings being higher, they would just write to you and tell you to pay it back.

What you have done is an offence and they take these things very seriously now. you will be interviewed under caution. Depending on the outcome, you will definately have to pay back what you owe them, you will be taken off the tax credit system and you will not be allowed to claim for that kind of tax credit for some time to come. It will go on your record but I dont think they inform employers unless they feel it necessary to take their payments directly from your wage.

You should have been honest with them in the first place. Its the tax payers who have been paying for you and your partner and you do deserve to be found out.

Answer 7

Hello, I am having problems with the tax credit as well, there are a lot of us in the same boat, they stop-ed my tax credit forcing me to go back on benefit, I really loved my work but without the tax credit I couldn't survive, enough about me, did you see the news yesterday (" Flood" of tax credit overpayment's continuing) in the article it said that the government had raised the amount by which income can increase without it being taken into account from £2500 to £25,000, I hope this information can help you . All the best
FRED

Answer 8

It sounds as if you were found out regarding your partner living with you. When it comes to awards you send them the info via the post. I do mine over the telephone.

I'm not meaning to sound harsh but what you did amounts to fraud and you could go to prison. Though if they take you to court and this is your first offence you will probably have a fine. You will have to pay the money back though. I don't think they will take notice of your reasons they would just be interested in getting the money back from you.

I Hope it is not because of this though, good luck.