Hi all. This is my first use of the RightsNet site and first contribution / query, sorry if it's wordy, hope you can help.
I am handling a Working Tax and Child Tax Credit overpayment case.
In brief, both clients (husband and wife) are from abroad and subject to Immigration Control. When Tax Credits were introduced (it was not made clear that "Persons Subject to Immigration Control" could not apply and) the husband made an online claim for Tax Credits, Dec.03.
The husband had an NI number having done part-time work at the University for some years. His wife however, had never acquired an NI number. As a result of the online application, she was called for (a 1 hour) interview at the local (main) DWP / Social Security Office. At this interview, it was made clear that both she and her husband were PSIC, as copies were taken of both passports, the wife was questioned as to why in UK, how long for etc...etc... She was advised that there application (and everything!?) needed to be checked and that they would here in due course. At no time was any indication given that they were not entitled.
A week later the wife received an NI number and a month later an award of both working and child tax credit was made.
Almost 20 months later, the couple were advised by letter that their claim was due to be checked by the local "Compliance Office". An initial letter was followed by interview where all details were given / taken again. At interview my clients state they were advised that they shouldn't have claimed, that the Tax Credits were recoverable on the basis that my clients had received Public Funds, that now they could be facing penalties and interest (unless the £8500 was paid back immediately) and that as Public Funds it could affect their Immigration status. In fear and panic the husband wrote a cheque for the full amount.
Then almost a week later he came to see me!
After a few days of info searching it became clear that something was amiss and so I advised the husband to cancel the cheque and I submitted an appeal. Funny enough the local compliance office, who had failed to return my calls, then got in touch!!
Accessing this site, I am left a little confused by the discussion threads on public funds, overpayments and appeals, for example:
Tax Credits are they yet public funds, if so, from when, if not, am I right in presuming that the compliance office need to come up with a better premis to recover?
My clients have at all times submitted full and correct information.
Having read documents COP26, COP27 and WTC4, it seems clear that there has been what we used to call "official error", and IR guidance says that recovery would not be actioned, further the penalties and interest that they were "threatened with" shouldn't apply, as there was no incorrect info, no fraud and no negligence.
Further to all this, my clients had used monies they had borrowed, to pay the overpayment, with the consequence that the husband may not be able to complete his doctorate (hence my advice to cancel the cheque), so failing all else, recovery will cause incredible hardship.
Reading the IR's own guidance the appeal seems straightforward, but discussions on this site suggest I am being naive in the extreme.
Has anyone had experience of a similar case or touched on any of the areas in the heading that may be relevant?
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