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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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HMRC wrote to my wife and I in November 2014 claiming we owed

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HMRC wrote to my wife and I in November 2014 claiming we owed them £1694.87 each in overpaid working tax credit & child tax credit for the tax year ending 5th April 2007. they have ignored all correspondence and are threatening to send in the bailiffs even though we now live in the Isle of Man, outside of the UK tax area. I would like to know whether or not they are in their rights to demand this tax back after such a long period. Thank you.

If you look here, you will see that the statute of limitations applies to tax credit overpayments so action needs to have started within six years of the debt becoming payable. What that due date is for overpaid tax credits I cannot tell you. It may be that the tax credit office have taken this long to locate you and proceedings were taken by the tax credit office earlier to stay within the time limit set by the law.

With tax, the tax authorities of two different jurisdictions do co-operate in chasing tax debts and will represent one another in the local courts. How that applies to tax credits is not something I've been involved with but you ought to seek good legal advice to find out what your rights are and, in particular, what the relevant date is when proceedings are said to have started as far as the statute of limitations is concerned.

I hope this helps but let me know if you have any further questions.
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