Reply To: Working Tax Credit overpayment


If you recall, prior to Tax Credits being introduced the Inland Revenue attended a number of HB events to tell us about their wonderful new system.

At the time they stressed that the word “overpayment” did not exist in the Revenue’s dictionary. Rather there would be “adjustments” as apply in PAYE. Therefore if the award was wrong one year, it would be adjusted in the following year.

Hence the fact that our Regs were written to specifically prohibit the use of notional entitlements in assessment and, on their original wording, you had to take into account the amount of Tax Credits paid in respect of a particular week.

The problem now is that IR have not stuck to that way of working but our Regs have been amended still assuming that the person’s award is being adjusted [HBR 40(6)].

They make no allowance for lump-sum repayments.

Yes, its inherently unfair. But then we are talking about the Tax Credit system at the end of the day, which is run by people who were only ever used to taking money off people, not giving it out.