The beginning of April heralded a new tax year. This in turn meant it is time for those who are eligible to renew tax credit awards. In case you don’t know, there are two types of tax credits; child tax credits and working tax credits. They aren’t a tax relief as such but rather a benefit that is paid out by the Her Majesty’s Revenue and Customs (also known as HMRC or the tax office). You don’t have to be a tax-payer to claim but any award is based on your income for a tax year.
This year, things have become rather more complicated for us in terms of tax credits as I began to earn a small, regular self-employed income. My husband also changed jobs which not only came with more hours but a higher hourly rate. These two factors pushed us very slightly over the upper limit for working tax credits. But never mind, we’d just had a small increase in earnings which just about balanced it and we still got child tax credits.
Soon after the new tax year started, I noticed our child tax credits were suddenly halved. Now, we get paid our tax credits every week and rely on that for our petrol each week.
So imagine my surprise one Wednesday morning a couple of weeks ago when I discovered I had less than £20 in the bank and needed (and usually get) £45 of petrol for the week. I checked my online banking app and saw how we were now getting less half of the tax credits we were before.
HMRC aren’t exactly known for their communication and working out your tax credits entitlement yourself isn’t easy.
A few days later and the tax credits renewal pack arrived in the post. Apparently we had been overpaid in the previous tax year, despite me calling them about every change in income and circumstances and despite the fact my estimations of earnings were pretty spot on to what we actually earned.
Add to this, that very same day I received a letter from a debt collection agency saying they had been instructed by HMRC to recover an overpayment. So not only was HMRC taking more than half of our tax credits to reclaim the money but a debt collector wanted to reclaim it too!
There was nothing for it but to give them a call. The start of a new tax year is absolutely the worse possible time to call HMRC tax credits office. However, the risk of having to pay a debt twice isn’t one we can afford to take or something we could wait to sort out.
I called them using the general enquiries number and after a number of redirects and being on hold for what felt like an eternity, I was given a different number to call. If only I had heard of Talk Tax. Talk Tax lists the telephone numbers for various government agencies and departments within those agencies, making it easier to get through to the right people first time. They also have super helpful guides from things like finding out how to get your Unique Tax Reference if you’ve lost it to how to cancel your road tax.
Thankfully, it turned out there was an error made and the debt shouldn’t have been passed to a debt collection agency. That was one less worry at least. I had to make a claim online to ask the tax credits office to consider taking a smaller amount from us each week, which is still pending. But at least we know we won’t be having a debt collector come knocking on our door now!
Disclosure: This is a collaborative post.