Paying Money Back Debt Problems

Tax Credits Debt Problems.

The Citizens Advice Bureau (CAB) has said that there has been an increase in the number of people getting into financial difficulty as a result of having to pay back tax credits.

Tax credits are overpaid when there are unexpected rises in a person’s income, this leads to HM Revenue & Customs (HMRC) requesting the money back. HMRC has denied claims that it harasses those who own money back on their working or child tax credits.

In the year to March the number of people getting into financial difficulty as a result of repayments has rose 14%. 30,000 cases of debt problems dealt with last year by Citizens advice were linked to being overpaid.

Some cases have even seen a repayment request of £7,000 after circumstance changes.

Comment

To be frank, if people have a pay rise or a change in circumstances e.g. more income, less income, receive a windfall, inheritance or monetary gift, we all know that if we are receiving additional tax credits or benefits, we should report the matter and have those changes taken into account. We do sympathise, but if your circumstances change, you must tell the relevant authorities.