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bigduckontax, Accountant
Category: Tax
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In 2004 HMRC overpaid my tax credit , they have sent me debt

Customer Question

In 2004 HMRC overpaid my tax credit , they have sent me debt recovery letter for the over payment.
What should i do ?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
This reminder is outside the limitation period which for England and Wales is 6 years, 5 for Scotland and the debt is statute barred. Furthermore debts are ambulatory [good word that] (not in Scotland) and the 6 years re-start on every reminder within a 6 year block. Your last reminder was in 2005, well outside the time limit.
Here is HMRC's own guidance on the matter [edited]:
'DMBM595080 - Pre-enforcement: limits in enforcement proceedings:
Limitation legislation
Limitation Act 1980
England and Wales
Debts that are not tax
In England and Wales only, the Limitation Act 1980 provides that recovery action for debts should commence within six years from the debt becoming payable. But Section 37(2) of the Act excludes proceedings for recovery of tax or duty and interest on tax or duty thus there is no time limit for those debts.
Other debts that are not tax, for example
contract settlements
tax credit overpayments'
So your solution is quite simple. Respond to HMRC's demand by drawing their attention to their own advice in DMBM595080 and, in simple word, tell them to take a running jump, the debt is stature barred. Do the same to the debt recovery company and make it plain to both organisations that no moneys will be forthcoming, not now, not ever and not under any circumstances whatsoever. Always do this in writing and retain copies of all correspondence.
This sort of cheeky approach by HMRC is typical of that organisation. They are trying to bump you into making a payment when none is due. I recall on one occasion a tax inspector demanded the immediate settlement in cash of tax that was not even assessed. Needless to say he did not get it!
I do hope I have been able to put your mind at rest and enabled you to get on with your life unhindered.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3119
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Your answer has given me big hopes & I will be writing to HMRC.

I am mentioning the year and date they have used for unpaid amount:

Period ending 05-Apr-2005 amount due 2821.60 gbp

Period ending 05-Apr-2005 amount due 780.01 gbp

Period ending 05-Apr-2006 amount due 1795.50 gbp

Period ending 05-Apr-2006 amount due 253.26 GBP

Period ending 05-Apr-2007 amount due 56.38 GBP

Every year we use to phone HMRC with our actual earning at the end of the financial year, but for some reason they kept on paying.

When I became in-eligible for tax credit due to higher income threshold they started chasing me.

I send them few letters back in 2007, then the matter was quiet till June 2014. All of sudden they have send me notice for collection in June 2014 & letter from debt recovery agency on 25-July-2014.

With above details I believe your previous reply still holds.

Please confirm.

Expert:  bigduckontax replied 2 years ago.
Provided that you have not acknowledged that the debt is actually due, as that also re-starts the 6 year ambulatory limitation period, then their demand is still statute barred. However, you say your letters were in 2007 and that is more than six years ago.
Thus my original advice stands.
Customer: replied 2 years ago.

thanks a lot

Expert:  bigduckontax replied 2 years ago.
Please be so kind as to rate me before you leave the Just Answer site.
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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