Will my friend go to prison?

Question

My friend has had a letter from the tax credits saying they want proof of her childcare costs, the thing is her baby doesn't go to childcare and hasn't for over a year and she rung the tax credits and told them this. But it seems they have been paying her for it still, in addition her P60 wages is about 6 grand more than what she advised them because her husband left her in the May so she had to go full time at work in order to be able to pay the bills, but she never told the tax credits (although they had taken into account her husbands wages which were no longer coming into the house) her husband didn't end up coming back until Christmas (because he missed the kids the pig)

So now she is panicking that they are going to send her to prison

Do you think if she offered to pay whatever she owes them back in a lump sum (she said she will get a loan if she has to) then the tax credits won['t send her to prison, as she is very very worried and hasn't been able to sleep :0(

er no weezyb, she has not been abusing the system, she told them about the childcare and they must not have updated their systems as per usual

I have told her to stop worrying about this, but she is a worrier about everything and she has had a ready bad year and this is just like the icing on the cake for her.

To be fair to my friend, the tax credits messed my own claim up big time and now they take 25% off me even though they had a record of the call I made to them to tell them my son had started pre-school and would no longer be with his childminder but they still continued to overpay me, whats worse is every time you call them up you get about 6 letters through the post all with different info on and when you call them up for an explanation they have no idea why so many letters were send with conflicting info on.,.. what do they do? resend all the letters aaahhhhh

No she has never been in any trouble with the police before (I think this is why she is panicking so much) and she does not have a criminal record

Ray... get stuffed a federal case? this is the UK, and although she earned more than she said she also claimed her husbands wages and he had pis*ed off for nearly 9 or 10 months so if she had took his wages out of the equation which she didn't as she had too much on her plate and ringing the tax credits was the last hing on her mind when she had a 6 and 3 year old to look after and work full time.

As for judging the both us? where do yu get off saying that ? you know neither of us?

Answer 1

Unless she's done this kind of thing before then no, she will not go to prison. And tell her NOT to get a loan; there is no need to. If she gets a loan she will have to pay interest on it, but she can make a monthly/weekly arrangement direct with the Tax Credits office which will be interest free.

If she genuinely did tell them about the changes, and therefore it is their error, then why is she feeling so guilty??

Answer 2

There are a number of issues in this question. First off your friend is at fault for not keeping the tax credits people up to date with her circumstances.

First the easy one the P60 figure in the tax year 2006 -2007 you were allowed to have your salary changed and there was a band of £25000.00 before it would affect the award. So your friend MIGHT not be penalised for this. However, you are supposed to advised the tax credits people within one month of a change of salary, so if she did not do this could be in for some penalties.

Second thing is that when her husband left again should have informed the tax credits people that the houshold has broken down, she would have then been able to claim on an award of her own. Again you have one month in which to inform .... then when he came back that single claim should have been cancelled and a new joint claim started.

Now to the point of the question. In my time working for HMRC I have never repeat NEVER seen anybody go to prison for not keeping their tax credits up to date.

Your friend could end up with an overpayment of tax credits, and if she still has an award running this will probably stop until the overpayment is cleared...... usually that it is it. However, if the stopping of a tax credit claim puts your friend into hardship she can ask for a reciew of circumstances, and to reinstate some of the claim.

If the overpayment can not be recovered by an ongoing claim, your friend will be asked to repay the overpayment. Your friend can ask for this to paid back in installments depending on her circumstances. Usually if the debt is cleared within 12 months then a direct debit will be set up and payments made with no further questions asked usually.

If it takes longer than 12 months then your friend will be asked for Income and Expenditure details of the household (ie her partners income will also be taken into consideration) and from that a disposable income obtained. The Revenue will then take a proportion of that disposable income to start clearing the overpayment and it will usually be reviewed in 6 monthly intervals. You could be charged interest on the amount you owe until the debt is cleared.

If after that an arrangement can not be mutually agreed it will be put into County Court, your friend could end up with a CCJ which will crash her credit record, but the court will decide how much she has to pay each month. Thats it usually, highly almost impossible for a custodial sentence.

If your friend really wants to clear the debt if any in one go then the Revenue will be delighted. The main thing now is get your friend to start talking to the Revenue NOW either on 0845 300 3900 which is the tax credit helpline, or on the number given on the letter your friend has recieved from the Revenue. The more you talk now the better it is in the long run.

Hope this helps and stops some of the worry.

Answer 3

In the UK the only debt you can go to prison for is called COUNCIL TAX.

Now if your friend goes to court on a fraud charge then she will need to explain all the circumstances to a judge.

A court hearing is unlikely, what will more realistically happen is that they will adjust the payments to suit any over/underpayments. At worst this will mean that there may be no further payments, or sometimes they ask for some of the money back.

It is best to communicate with them and just ask them to re-calculate based on the true facts of the situation.

Claiming the childcare element of the tax credit system, when it is not being used, is actually fraud. They usually write to the childcare provider and they confirm they care for the child. So who has been looking after the child?? A grandparent does not count, as the childcare provider has to be, a registered childminder.

Prison is highly unlikely, in fact just the figures need altering and the dates of the changes declared to the tax credit office.

Answer 4

if she can prove she has told them about the childcare and they have a record of the phone call then she can argue that it isnt her fault but she will have to fight it. as for the P60 issue, yes she may have to repay some if the extra money she is earning is more than what was stated as her husbands income. if it is less she may be entitled to more. if she owes money then this is normally done by reducing the current payments she receives, however im sure they will let her pay a lump sum if she has the funds to do so. but bear in mind that she will be paying interest on a loan, but wont be paying any on receiving reduced payments from the tax credit people.

she wont go to prison as this isnt such a big issue as it happens all the time where tax credits people mess up and make you look like the bad guy.

at the end of the day, your friend wasnt to know that the moneys she has been receiving are incorrect unless they provided a break down of what was included in the payment. As long as she told them asap, then its not her fault.

Answer 5

(Well Colin it's a shame your department didn't try creating a system which you don't need to be a forensic accountant to understand.)
I suggest your friend goes to Citizen's Advice and gets them to help her inform the Tax Credit people of exactly what happened when so that they can recalculate it all and arrange to recover any overpay at a reasonable rate. It is highly unlikely that she will go to prison even if she had committed fraud (not that it seems that way from your question) and since she has tried to keep on top of things I'm sure she has nothing to worry about.

Answer 6

If this is genuine as you've stated she must contact them immediately, being open and honest about her circumstances. They'll probably make a lot of hot air, and settle for an arrangement, that suits all to reclaim the excess payments. As for going to prison I wouldn't have thought so, the cost with everything is enormous, and they wouldn't get their money.

The answer by "colin s" an employee 'DWP', well ignore him, these are the people who can not get their own accounting house in order, cheques returned in correct envelopes to cover over-payment of my recently deceased mother, one sorted other allowance, a total of six letters each two days apart requesting/demanding this be paid, excuse well different depts.

So if it's genuine I don't think your friend has to worry about prison.

Answer 7

She may be found guilty but there are extenuating circumstances.She may get fined and possibly have to repay some of the overpaid money,which might cause her financial difficulties,but I think it is unlikely she will be sent to prison,especially as she has young children.I am assuming she does not have any convictions for similar offences previously as these would be taken into account in determining the sentence.

Answer 8

you cant go to prison for being in debt, those days are long gone. embezzlement and insider trading corperate fraud are prison worthy crimes but its only a soft sentence in an open prison. your friend will not go to jail. she may get a county court judgement and may have to pay a minimum amount of money untill the debt is paid off. i owe the working tax credits people 88 quid, they can go fuc'k themselves i aint paying it and i'm not worried. i've busted my as's off for 20 years. they can't touch me. tell your friend not to worry she wont go to prison, she can agree to pay a minimum amount back each month, might even be 5 quid a month.

Answer 9

Hello.Please advise your friend to contact the Citizens Advice Bureau on Monday as a matter of extreme urgency. They are the best people to help in respect of tax credits and custodial sentencing. If your friend puts off going, she will simply make an already bad situation worse.It is not in her long-term interests,or that of her family to delay starting to find a remedy.

All the best, Alan L.

Answer 10

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