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HMRC Tax Credit Scandal

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Tax Credits

Dateline: 26th March 2014

On 6th November 2013 I received a demand from HMRC asking for repayment of Child Tax Credits (CTC) which had apparently been overpaid in the 2004-05 tax year. The amount they were demanding was 247.57 and my wife received an identical letter asking for the same amount. How very strange that it took them eight years to make their demand!

The fact is that my wife applied for CTCs when the government were regularly advertising their availability and exhorting everyone to take advantage of the benefits. So she filled in the relevant forms, supplied our income details, and HMRC started to pay the benefits which they calculated.

Later they decided they had made a error in their calculations and would reclaim the overpayment by reducing the benefit paid in the future. This they did until our income increased to a level which meant our entitlement ceased.

This is all well and good except that the claimant is never told how the benefits are calculated so is unable to question the amounts. You just rely on the people dishing out the money to know what they're doing. Clearly, they don't because they do make mistakes, and this particular branch of the government apparently made this mistake quite regularly as the internet is full of stories from other victims.

In normal circumstances, a person who makes a mistake in the private sector has to accept responsibility and may have to stand the cost of the error, sometimes resulting in job loss. Not so in state enterprises: they make mistakes and you have to pay for it because civil servants will never accept responsibility and won't even admit their mistakes.

However, I ignored the demand dated 6th November 2013 because I had previously received a Statement of Account on 26th May 2011 telling me there was nothing due and no money outstanding from me for previous years. That letter was sent two years before their demand letter and was sent in the name of Paul Gerrard who is based at the Preston office.

When I received the second demand dated 20th November 2013 I wrote to Ms D Barraclough (the signatory on the demand) on 2nd December 2014 explaining that I had no intention of paying money I did not owe. Ms Barraclough ignored my letter completely and issued yet another demand dated 6th January 2014.

Shortly afterwards we received a telephone call from HMRC's debt collection agency. During the conversation, they stated that my letter to Barraclough had not been received because it was not logged on the system. Remember this as you read on because later developments demonstrate just how much these people lie. Meantime I was given an address to make a formal complaint which I did, by letter, on 24th January 2014, addressed to the Complaints Department in Preston. But this time I sent it by recorded delivery. My letter was delivered on 27th January and I had a signature to prove it.

The HMRC website states that complaints will be acknowledged and will usually be dealt with in three weeks. By 6th March (over five weeks later) I had heard nothing so I sent an email direct to Paul Gerrard - the head honcho in charge of tax credits. I got an immediate 'read acknowledgement' but I didn't get a reply until yesterday, 25th March 2014 - three weeks after my email; two months after my letter of complaint!

The contents of this letter - written by L Douglas, Customer Support Service Group Manager - cover the payments made to us in tax year 2004-05 yet with no explanations how any of it, or the repayments they collected, was calculated. I suspect it's a black art practiced by the secret services department of HMRC. It then went on to say they hadn't made any mistakes so the overpayment was still recoverable by them.

It then confirmed the dates of their demand letters and stated that I didn't respond to any of them. In the next sentence they admit to receiving my letter to Ms Barraclough dated 2nd December 2013 and said this letter crossed with their final demand letter of 6th January 2014. I'm sorry but I fail to see how these letters crossed in the post because a month and four days had elapsed. Even more puzzling, I had previously been told they never received my letter! My suggestion is that they did receive it but Ms Barraclough couldn't be bothered to deal with it and issued another demand instead. It sounds very likely that she may have tried to hide my letter and, I am told, this sort of thing does happen in the civil service. Surprise! Surprise!

In my letter of 24th January I specifically lodged a formal complaint about Ms Barraclough's negligence but there was no mention of that in Douglas' reply. Another cover-up no doubt. Then I noticed that Douglas referred to WTC throughout his letter. WTC is Working Tax Credits but we never had WTC - ours was CTC (Child Tax Credits). I suspect this Douglas person doesn't actually know what he's doing if he can't get the subject matter right. But he can carry on as normal, confident that someone will cover-up for him.

The next paragraph goes to great lengths to point our that when form TC607 (HMRC's Statement of Account) says 'amount you owe us from previous years' (in our case 0.00) it actually means 'money recovered from your previous award to repay overpayments from previous years'. What a load of bollocks! I have spent most of my life writing English and I think I have a fairly good grasp of the language. Certainly makes me wonder where HMRC personnel were taught.

Naturally, I have no intention of repaying this money but I can't see any point in writing to Paul Gerrard again. He is mentioned many times on an anti-corruption website (Google him) and you don't attract the criticism he has by being a nice, honest bloke.

I could, of course, address a letter to the top of the HMRC chain, Lin Homer, but she got that job after making a complete cock-up of her previous job heading up the Border Agency. She has just been criticised by the public Accounts Committee for using anti-terrorist laws (Regulation of Investigatory Powers Act) to obtain phone records to unearth information about a whistleblower in her organisation who had let it be known that HMRC had let Goldman Sachs get away with not paying interest amounting to 10m on a failed tax avoidance scheme.

Homer, who is paid 180k per annum and has been nicknamed 'Ms Incompetence' by the Daily Mail, refused to give assurances that HMRC would not use RIPA again. No wonder our country is in such a terrible state if these are the best people they can find to head up major departments. It seems failure in the Civil Service merely results in promotion.

But what I find truly galling is that while they were chasing me for a piddling little sum, they were doling out money hand over first to that well-known preacher of Muslim hatred, the suspected terrorist Abu Qatada. He was milking the UK benefits system to the tune of more than 50,000 a year.

It's also fair to point out that taxes of millions of pounds owed by many large corporations - some of them foreign - were completely written off by HMRC. They'd rather pursue the small man who is easier to get at, and can be more successfully harassed, threatened and bullied.

Doesn't that tell you that being a true supporter of your native country can be a distinct disadvantage at times? Especially where our recent  governments are concerned.

Hopefully, HMRC will accede to my request for a court hearing and then I can find out how a judge might interpret the 'English' anomaly in Douglas' letter. Meantime, I'd link to hear from any other readers who have had similar problems with tax credits. Click the link below and let me know.

Visitors' comments

Steve Goodman of Sherburn In Elmet writes:

We applied for Family Tax Credits in 2004 when I was retired from my last job (police officer) due to an injury on duty. I rang the Tax Credits Office (TCO) on 3 occasions to ascertain whether I had to declare my police pension as it was awarded as Injury pension and part tax-free. I was told on all 3 occasions by 3 different advisers that I did not have to declare it, so I didn't. Two years down the line I received a letter from their compliance department fining me 300 for failing to disclose my pension! And I now owed HMRC (TCO) 9000.

I contested this fine and told them to check the phone records which they did and subsequently rescinded the fine proving it was their cock-up. However they adjusted my TC award and lowered it taking in my pension but paid me nothing as what I was entitled to was being used to repay the over-payment.

When my daughter reached 18 and my TC award was finished they then sent me a letter stating I owed them 6990 for the alleged over-payment even though it was their mistake. I have repeatedly asked for copies of the 3 phone calls and letter of fine and letter rescinding the fine but have never received them and they now tell me that records are not available after 7 years. How bloody convenient for them!!

Now I'm receiving letters from EQUITA Debt agency acting on behalf of HMRC to recover the debt for which I'm not responsible. I have spoken to my solicitor who has advised me to take this matter to my local MP and refer it to The Parliamentary Ombudsman. Meanwhile I cannot contact HMRC or Tax Credits Office by phone to make them aware of the new direction I've taken and to call off EQUITA as none of them answer the phones. I have written letters to all departments sending them registered to let them know.

After 9 years of grief watch this space!!!!

Editorial Comment:

As an ex-police officer you will probably have noticed the large number of fraudsters working for the government, not to mention the vast number of incompetents employed by HMRC. But nobody does anything about it because they don't care.

"Many men stumble across the truth ... but most manage to pick themselves up and continue as if nothing had happened."

Winston S Churchill

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