Client claimed CTC in July 04 (she has 10 children) but problems with the computer system resulted in manual payments being made from 9/12/04 to 17/2/05. When the IR resolved the computer problem on 8/2/05 they issued payment which duplicated the manual payment. My client would not have understood that she had been overpaid due to a duplication of payment and we have only recently been advised as such by the IR following a formal complaint as to the cause of the O/P.

The revenue state that my client signed an 'off system payment declaration' on 9/12/04 (they provided a copy) which explains that the above situation might occur and that under those circumstances any overpayment may be recoverable.

The O/P is currently being recovered from the ongoing entitlement to CTC.

Apart from the usual courses of action that might be pursued does anyone have any experience of dealing with such overpayments and succeeding in getting the IR not to recover.

Yes I'm dealing with a similar case, where the computer didn't pick up the manual payments until several months later, thus creating an overpayment. We have challenged the overpayment in the usual way, and are still awaiting a response.

The point you make about the 'off system payment declaration' is interesting and potentially problematic. I will have to find out whether my client signed any such document.

During a phone call to HMRC they said that a lot of overpayments are caused this way, becuase the computer system never picks up that manual payments have been made until some time later. The declaration you have referred to would appear to reflect a recognition of this problem on the part of HMRC, and a clear attempt to try and secure recovery of the resulting overpayments. This is pretty rough on the poor punter when the blame lies squarely on the shoulders of the revenue. Surely the HMRC should instead be focusing their attention on changing their procedures to make sure that manual payments are promptly recorded?

This is an extremely common type of overpayment and in my experience yes, all clients do sign a declaration before manual payments are issued to them. Whether your client has signed or not, the dispute to this overpayment is going to be extremely difficult in my view because of the "reasonable" hurdle. Your client's award notices during the tax year would have clearly stated the amount your client was entitled to for the entire tax year. Your client knew how much they had actually been paid, so it is virtually impossible to state that your client could "reasonably" have thought they were being paid the correct amount. (Just preparing you for the HMRC stock response, I, of course am outraged that Tony hasn't shut the whole system down considering the mess that has been made so far).

refreshing an old thread - I wondered if anyone has got anywhere with cases on this issue as I currently have a client in this position and wondered if anyone had got anywhere with this.

a slightly different feature of mine is that the cliet came to see us because she knows that she will have to repay the money, so there's no issue about 'reasonably know', but she kept the lump sum computerised paymnet and insists that she wants to pay it back as a lump sum so that she doesn't spend it now and still have deductions made next year but they won't let her! any suggestions on that aspect welcome!

thanks
caroline