I have a client who in November last year had became the legal guardian of her nephew and niece aged 15 and 13. During a routine visit at the start of this month I noticed that they had her nephew down as being under 1, so I phoned them up and informed them of the fact, and gave them, for the second time, the date that she became responsible for the children.

She has just been in to see me with the new award letter, and final statements for 05/06 and 06/07. The adviser that I spoke to has incorrectly entered the information so that it now appears that my client had responsibility for her nephew from April 2005, and have paid her over £7000 for monies that would have been due to her in 2005-2007 has the boy been living with her. I phoned them up and told them that they'd got it wrong again - and this error was reported well within the month.

So the question is: will she have to pay it back. Looking at the new COP26 it says:

"What if we fail in our responsibilities?
If you fulfil all of your responsibilities but we have failed in ours, we won’t ask you to pay back all of the overpayment arising from our failure.

However, you must report any errors on your award notice within a month of receiving it. If you do then you won’t be responsible for any overpayment which has occurred because of our error."

I notice they say they won't "ask you to pay back all of the overpayment" - what does this mean in practice?

Something tells me this is too good to be true...

"Something tells me this is too good to be true..." Me too!!

I can't believe they intended to create a situation where they had no power/right to recover for this sort of error. However, the law of unintended consequences rides again!

I do hope the claimant is putting it in an interest bearing account and not spending it while you see what TCO decide to do!

She's put some of it (£5000)in a savings account. She very sensibly paid off her credit card with a grand of it. As she says, if she has to pay it back to HMRC, she'll not have to pay interest on it and it'll only be taken off her award at 10%.

Has any one else had experience of this?

Wish me luck as I try to get the phone recordings off them.

It certainly seems that the wording in the new COP 26 would mean it should be written off. However I agree that it is probably an unintended result on HMRC's part.

I would send a dispute before you get the telephone recordings. HMRC can request them if they need to. You just need to set out that HMRC have failed in their responsibilities (i.e. processed the change incorrectly) and that the claimant met her responsibilities (via you) by telling them within 30 days of the error on the award notice.

If they come back and refuse, then you can send the telephone recordings to them. But if you have the call details I would certainly not delay in disputing.

One thing to note for your client is that it will only be deducted at 10% for as long as the award remains. If for any reason the award ends (moves in with partner or leaves partner etc) then it will switch to direct recovery.

This is an interesting one, it would be great if you could let us all know the outcome.

Victoria

Am I right in thinking that this reflects a change in their code of practice, which still leaves HMRC with the discretion to decide how much, if any, of the overpayment to recover?

I'm just bumping this back up to the top again as my client has still not received an award notice for the period when the overpayment happened. Her claim has been stuck in a "processing queue" since february and they are paying her by cheque.

I'm assuming that "processing queue" means that some high heid yin is looking at it and wondering what to do, but in the mean time they've sent her an incorrect award notice for this year, even though they're paying her the right amount. I've sent the notice back to Preston and asked for a correct one.

Even the guy that I spoke to on the intermediaries' helpline yesterday was impressed by the level of this cock up - it's nice to stand out from the crowd, isn't it?

Thu 07-May-09 10:11 AM by Ali Lord

Well we finally have the correct final award notices for the past five years - even though we had had some of them before this all kicked off, we've had them again. HMRC are now saying that the overpayment is just shy of £7k as it would seem that they recovered some of it last year when my client was being paid manually and when she did not have a correct provisional award notice - any thoughts on this anyone? Seems slightly dodgy that one side of the TCO is saying that they don't know what her correct award is due to it all being held in the processing queue whislt the other is taking back an overpayment caused by their own error.

So the TC486 is in, just have to wait now. And wait. And wait...


(should say, I am ali l and PHACE became Terrence Higgins Trust)

Are they actually asking for it back then? What grounds do they state - if any?

They haven't sent a letter out stating that there has been an overpayment that must be repaid, just done that thing with this year's provisional award saying that my client has to repay loads of money.

So, we send in the TC486 saying that my client has fulfilled all of her responsibilities and informed the TCO immediately she noticed there was a mistake on her award notice. The problem is at your end, I said, because somebody has recorded the details incorrectly saying that she had changed a date of responsibilty when she hadn't.

We get a letter back saying, we've looked at the records we have for you and apparently you told us wrong information about the date of responsibilty for your nephew so you have not fulfilled your responsibilities.

I have written back saying, yes, we know what your records say....and so on and so on. I've requested the phone records but they haven't come through yet. I wonder if they will have lost them?

Ali

Did they mention in their response whether they had listened to the phone calls?

I always find it useful to remind them that their overpayment manual guidance states that if a claimant (or adviser) mentions a phone call in dispute letter, they should request it.

Victoria

No Victoria, they just said that they had checked their records. We did mention specific phone calls on the TC486. I'll see what happens with the letter that I've sent in in reply and with the request for the phone records, but thanks for that - it's useful to know.

Ali

In case you want to quote anything in future the action guide is here:

http://www.hmrc.gov.uk/manuals/ntcmanual/payment_opayments/ntc0780032.htm

Step 9 is the one that refers to phone calls.

Victoria

The length of time this is taking is totally unacceptable - the recordings of the telephone calls should be supplied within 42 days of the request - i was told this by someone from the data protection unit just a week or two ago.

I would strongly suggest that you get your clients local MP involved and ask them to bring some pressure to bear to get this matter sorted out.

Nicky

The time limit Nicky refers to is set out here:

http://www.hmrc.gov.uk/leaflets/dp-fs1.htm

It also talks about going to the Information Commissioner.

Victoria

My immediate reaction is - was it reasonable for her to know she had been overpaid at the time she got the money? If so it's a bit like those stories about cashpoint machines that start giving you £500 when you only asked for £50: no amount of coeds of practice ought to justify you keeping money you know is not due to you. There is case law (general law, not soc sec or tax credits) that indicates that in such circumstances people can be guilty of theft.

And it continues...

Apparently all the recording equipment at the Liverpool call centre is buggered and calls cannot be retrieved. At least the printed schedule goes some way to confirm what I've been telling them, ie, that my client did not phone up and tell them a load of rubbish.

Ariadne, I take your point, but there is a bit of principal at stake I feel: there should be some sort of check before a lump sum payment of £7000 is made, and the fact that they recorded errors which meant that four years of incorrect backdating was paid - there is obviously a fault with their recording system. And I still feel that to (over)pay someone living in poverty who has done nothing wrong such a life changing (for her - it cleared all her debts which in turn helped her mental health problems and helped her return to work) amount of money and then take it back is, if not unfair, then a bit crap. I don't think I'm doing my job properly if I don't try to get it written off.

On the issue of phone calls, there was a period from January 2003 to September 2004 when HMRC acknowledged they didn't recall all phone calls.

For this period, HMRC agreed that 'For calls made in this period where there is no record held, the claimant should be given the benefit of the doubt and staff dealing with disputes are aware of this.'

(taken from the minutes of the TCCG group available online here http://www.hmrc.gov.uk/taxcredits/minutes041208.htm)

If there is a known problem with retrieving calls, then I think you should put the same argument forward with respect to the phone call evidence. In the absence of evidence to the contrary, your claimant should be given benefit of the doubt regarding what was said in the phone call.

Victoria

Oh my giddy aunt...

Have just had the official reply to my letter of 13th May in which they say that it's all my client's fault for not informing that her nephew's date of birth was wrong soon enough, even though they admit that this wouldn't have had any effect on the award and even though when she did phone up to tell them the DOB was wrong - that it was 1992 - this was when "unfortunately the responsibility date was also input as being xx/xx/92. This resulted in lump sum payments being issued on the 2005-06 award of £3,361.48 and £3,638.60 on the 2006-2007 award."

So, to summarise, basically they're saying: we recorded some information incorrectly on 3/12/07 (that didn't affect the award amount), client told us it was wrong on 4/2/08 but we recorded even more wrong information which did have an effect on the award and we made a huge overpayment. Client told us this was wrong as soon as she received the award letter and o/p on 18/2/08, but because she was too late in telling us about the original error she did not fulfill her responsibilities.

Any thoughts?

What i think of this would be too rude to print!

Dispute, dispute dispute!

Good luck.

Nicky

It's so obvious isn't it? They've b******d it up big time so they hunt around to find any excuse they can to blame the claimant.

It is an interesting one - I'd have thought the "not met your responsibilities" bit of COP26 should (must?) relate to responsibilities which are relevant to the overpayment in question. Otherwise, where does it end? Do you get a situation where they can hunt back for years to find something the claimant can be said to have done wrong?

Having said all that, I do have sympathy with ariadne's view. It appears from what you say that your client knew as soon as she got the money that she was not entitled to it so it is difficult in equity to make a case for her keeping it.

In my view a responsible position for TCO to adopt would be to admit it was their fault (rather than stupidly trying to blame the claimant) but to make the equity point and offer to write off a % to recognise their error.

I have a similar case which I am wondering the same thing about.

Client made a paper claim for TC's with his partner and they sent him award notice and made payments of £2000. He thought this was a bit much so he asked me to check. Turns out TC had assessed claim on nil income despite putting on the form that he works 37 hours.

We have told them within 30 days and they have amended claim and raised o/p of £1100 and stopped any further payments this year. Can we use the same argument to write off o/p, it was their mistake, he told them within 30 days? I've told him to put it in a savings acct at any rate so it is there if he does have to pay it back.

Thanks