Could someone update me with the current position concerning overpayments purely caused by cancellation of current award due to late return of an annual declaration?

There is no actual loss to HMRC - the overpayment is purely a technical one.

Would the situation be any different if the annual declaration had never been received at all by HMRC, rather than just received late?

Many thanks all

If the claimant makes contact within 30 days of the Statement of Account(SOA) date then HMRC should restore the claim - regardless of fault. http://www.hmrc.gov.uk/manuals/ntcmanual/ren_misc/managing_corre_ident_ren_term_ag.htm

After this date the claim can still be restored (and thus any overpayment cleared) if good cause can be shown.

In some cases the helpline have advised that a new claim should be made and the resulting overpayment disputed. This is really a last resort and I would argue wrong advice was given by the helpline if the claimant did make contact within 30 days. Obviously outside the 30 days this might be the only option.

If a new claim was made then they should get 3 months backdating which may offset some of the overpayment.

I don't think HMRC treat the situation any differently regarding whether it was received late or was not received (or indeed was lost in the post). In my experience advisers have found these overpayments difficult to dispute, but they seem grossly unfair.


Victoria

recovery implies that HMRC don't consider them grossly unfair, or else fairness is considered irrelevant within the remit of the administering department. HMRC's primary purpose is collection of taxes, perhaps this is part of the problem?

the decision in these cases is to retrospectively disentitle a person by DEEMING them disentitled, whether or not they actually were entitled, and the decision DEEMS the claimant to owe HMRC an enforceable debt. There is provision in legislation for £300+ penalties for non-provision of info, but such 'overpayments' may be 10 times that amount or more. i'm looking at one now for £4139.

If it was intended that HMRC should obtain such sums from tax credit claimants, and its difficult to see any rationale for it, when it conflicts with the primary purpose of the tax credit legislation (support for low income families, towards the objective of reducing child poverty), wouldn't it be explicitly stated in primary legislation? and wouldn't section 28 refer to when a person receives more than he is entitled to, or deemed entitled to under section whatever (that they never say)?

interestingly, HMRC in demanding £4000+ because she didn't return an annual declaration within 30 days took 5 months after they received the claimants incomplete annual declaration to write out to her again, having already made a provisional award, which was never disrupted. Claimants have no recollection of receiving it, and state they woiuld have responded immediately if they had. It was then 2 years before they wrote to them (took any action) demanding money.

part of the problem seems to be that there is no actual decision on overpayment and recovery by humans - there is a computer program and an input procedure instructing which buttons to press.