I have been approached about a case where a woman has been left with a substantial tax credit overpayment (several thousands) after her partner left her.

She doesn't know where he has gone, and HMRC are demanding full repayment from her.

I appreciate that they can do that if they can't trace him, but page 9 of COP 26 does say they will make every effort to trace him. In this case all they appear to have done is to write to him several times at the family home, after she has told them he has left it.

She is receiving disability benefits and has been left with the children. We obviously don't know what his financial situation is but it seems likely that it is better than hers.

Just wondered if anyone else had similar experiences and how they approached it.

Surely they can trace his employment details as they will have his NINO...

I agree, but my point is they don't appear interested in trying to find him as they know they can get the overpayment back from her.

Start a complaint based on the fact that HMRC are not following their own guidelines in COP26.

The very best of luck to you!

Please let us know how you get on Chris

May be worth checking with the client if any misrepresentation etc. were solely made by her ex-partner?

In CTC/3543/2004 Commissioner Jacobs held in the case of a separated couple that as two overpayments involved misrepresentations by the wife only both were recoverable solely from her.

Thanks that's really interesting and I've passed it on.

In answer to the previous posting I came to this issue third hand and I'm not sure how it has been resolved. However, I will post again if I hear anything

I suspect that the issue isn't misrepresentation. Payments under an initial award become an overpayment if the claimant (or either claimant in a joint claim) fails to send in their Annual Declaration.

I'd put money on it being his failure to send in the AD that has caused the o/p - so there's probably little if any true loss to public funds either.

I've had a couple like this recently, one of which has been passed to a solicitor for consideration of JR; see this thread: http://www.rightsnet.org.uk/dc/dcboard.php?az=show_topic&forum=104&topic_id=2111&mesg_id=2111&page=

It strikes me that this whole problem might be ripe for some social policy work - anyone from Low Income Tax Reform Group reading this?

Hi Chris,

Are we talking about splitting the recovery alone, or is there an element of the 'guilty' and the 'innocent? Here is a para 14125 of the compliance manual. If the latter, I don't thing that a decision not to recover from an innocent party should depend on the Revenue's ability to find the guilty party etc. I know that there is a possible issue of the Revenue not wanting to apply Compliance principles outside of Compliance cases, but they seem to be doing it with offset etc, so why not!

What do you think?

Steve

CCM14215 - Closing The Enquiry: Who will meet the settlement?

Who will meet the settlement will depend on the circumstances of the case.

1. Single claimant – in these cases your settlement can only be with the claimant. The position is the same even if the reason for the settlement is you have established the claimant was living with someone. The newly discovered partner can never be asked to meet the settlement or even help towards it but see CCM 8430 regarding the means of the single claimant.
2. A couple who are now separated – although they made the claim as a couple and the legislation provides for them to be jointly and severally liable for the overpayment and the penalty. However, if they are separated by the time you come to settle the enquiry you must split the settlement between them.

You will be working the settlement with the objective of obtaining two separate letters of offer. How you split the settlement will depend on the case. In most cases the split will be on a 50:50 basis but you cannot ask either of them to repay an overpayment or a penalty for a fraudulent or negligently incorrect claim where they had no knowledge of the fraud or neglect and could not reasonably have been expected to know of it.

3. A couple who were both aware of the incorrect claim – Where the couple is jointly and severally liable to repay the overpayment and are both considered to be guilty of fraud or neglect, you will be seeking a joint letter of offer. This will be in both of their names and will be signed by both of them. If this is accepted, the settlement charge (the 94A) will show both of their names and the recovery officer will then pursue either of them or both of them to settle the charge.
4. A couple where one is an innocent partner – where you are satisfied that one of the partners did not know about the fraud or neglect, you must not ask that partner to repay the overpayment or pay a penalty. The settlement must be with the other partner as if he/she was a single claimant.

In some cases there might have been more than one error and it is possible for a partner to be aware of one error but not another error. In these cases you will need to split the overpaid credits and penalties between them in a reasonable manner. You might then be asking one of them to enter into a letter of offer in their own right for the error only they knew about and then ask them to enter into a separate letter of offer in joint names. There will then be two separate settlement charges for the Accounting and Payments Service, Network Unit to pursue.

Thanks for this it's certainly very interesting. My problem, though it's one most of you would probably love, is that I don't usually do case-work but policy and promotions. Consequently the reality of the way things work on the ground sometimes escapes me.

I got this case from a front line adviser, but the injustice of it struck me, hence my enquiry.

I understand there were two overpayments. One caused by a failure to return a review form, the other the result of the break up of the couple, which was also unreported.

The client is disabled and had been in the habit of leaving the paper work to her partner. Yet now she is the one expected to repay thousands because he's gone away.

I do feel this is relevant and will pass it on to the adviser directly concerned. Sadly however I fear we are probably too late as (apart from the time constraints) the client may not want to fight it.

This is an issue which interests us at the Low Incomes Tax Reform Group.

The formal position of HMRC is that they bend over backwards to be fair and reasonable in the circumstances described.

If the front-line adviser would like to contact us through our website at www.litrg.org.uk we would be pleased to review the position and, if wished, help with the arguments.

John

Hi all. I have some news on this type of case. Myself and several colleagues here in Citizens Advice NI have been quoting page 9 of COP26 ad nauseam for about a year now. We have a number of clients who have approached various bureaux with TC overpayments that arose on joint claims, for varying different reasons, but all of which would be deemed fully recoverable by HMRC standards. However, in each case the clients argued that their ex-partners should be pursued for recovery of all or a substantial part of the overpayments. The reasons were specific to each case but generally:
* the client was in receipt of IS after the seperation and responsible for the child/children, whereas the ex-partner was working
* the bulk of the overpayment was WTC which would have been paid directly to the ex-partner and over which the client had no control
* in all cases but one the clients have been women, TCO have pursued them for the whole overpayment quoting the jointly and severally liable rule and obviously the person who stays at the same address and has to make a fresh claim for CTC is more easily pursued.

We have been quoting page 9 of COP26 in all our correspondence with TCO and they have been routinely ignoring our requests that consideration be given to all or a substantial part of the overpayment being recovered from the ex-partner rather than the client.

At the recent high-level technical workshop in London I raised two cases with a manager from Debt Management - she has taken the issue away and I am awaiting guidance on the procedure. However, in the meantime, one of my colleagues has progressed two of his cases to adjudicator level and in both cases the adjudicator has upheld our argument and the clients in each case will not be asked to repay any of the overpayment, their ex-partners will be pursued instead.

Hope this helps!!

It is clear that the Revenue are persistently ignoring their own code of practice, at least so far as overpayment recovery is concerned. One example is described in the previous message. The new COP 26 (page 8) retains the possibility of uneven recovery in couple claim cases, yet this seems not to be happening, despite heavy representations (see earlier thread).

Take another example, which is hardship based write offs. Again the new COP 26 carries this possibility, both for on-going tax credit award cases, and in direct repayment cases. Has anyone ever managed to get a write off on purely hardship grounds, especially when tax credits are still in payment?

What can we do about this? I note that the business of uneven recovery was raised at a high level workshop (as per the earlier thread). Lets hope that the matter is not simply ignored, albeit at a similarly high level!

Steve

No never had a write off on hardship grounds.

I've had one. I nearly fell off the chair.

Was there anything terribly remarkable about the case you succeeded with? It would be good to know what the circumstances were. I hope it wasn't just a case of maverick reasonableness.