HM Revenue and Customs

4. Miss S complains that HMRC failed to act on information she provided in early 2018 regarding her updated employment.

5. She says that HMRC’s failure to act has resulted in an overpayment of over £6,000 that it is seeking to recover. She says the debt is a constant burden that causes her stress and sleepless nights while having a toll on her day-to-day life, particularly with the ongoing cost of living crisis.

6. She would like HMRC to review its decision to recover the overpayment. She would also like compensation.

7. In February 2018, Miss S sent HMRC a digital change of circumstances stating she had started a new job in January. This did not contain information about any increase in her household income.

8. In March 2018, Miss S sent a further digital change of circumstances advising that her income had reduced to £22,001 from £29,363. HMRC sent a revised award notice two days later.

9. In July 2018, HMRC received Miss S’s tax credit renewal which indicated a household income of £23,000 and four days later it issued her award notice for the 2018/19 tax year. This indicated that she was entitled, based on the information it held, to Child Tax Credit totalling £6,459.81.

10. In April 2019, HMRC issued a final declaration and asked Miss S to confirm her household income for the 2018/19 tax year. Miss S submitted a digital change of circumstances on 30 July 2019 indicating that her household income for that year was actually £42,680.

11. In September 2019, HMRC issued a finalised award notice for the 2018/19 tax year based on the most recent household income of £42,680. This stated that she had not been entitled to Child Tax Credit and had, therefore, received an overpayment of £6,459.81.

12. Miss S called HMRC in January 2020 to discuss the overpayment. HMRC explained that this was due to the increased household income it had been unaware of. Miss S and HMRC agreed a repayment plan that day.

13. In February 2020, Miss S disputed the overpayment as she said she called HMRC in January 2018 to inform it of her increased household income.

14. HMRC completed its consideration of her dispute on 18 February and called to advise that the amount remained recoverable. It explained that she had not met her responsibilities as set out in Code of Practice 26.

15. In April 2020, HMRC withdrew her Child Tax Credit for the 2019/20 tax year, but as she had already received a payment of £122.33, this became an additional overpayment.

16. On 5 September, Miss S disputed the overpayment again and stated she had evidence she had called HMRC to notify it of her change in income that it had failed to act on at the time. This led to the overpayment.

17. On 15 September, HMRC responded advising she was out of time to dispute the overpayment further as she had to do so within 30 days of its February decision.

18. On 26 September, Miss S contacted HMRC to again dispute the overpayment and said this was new evidence it needed to review that had not been considered before. She explained it had been difficult to obtain until that point.

19. On 29 September, HMRC again refused to consider the dispute as she was out of time.

20. On 1 October, Miss S submitted a complaint to HMRC stating she had written twice and submitted new evidence, but this had not been considered. She reiterated that she had called HMRC to update her information and HMRC had not acted on this information.

21. On 6 October, HMRC responded stating it had no details of her contacting them during the 2018/19 tax year regarding an increased household income. It asked for a copy of her phone bill to review possible dates of contact.

22. On 8 January 2021, Miss S complained further and provided a copy of her phone bill from February, March, and April 2018. She highlighted calls made to 0300 200 3300 in March and April and requested it review this evidence.

23. On 14 January, HMRC issued its response stating it was unable to locate the call dated March 2018. It explained that the overpayment remained recoverable as she did not notify it that her income was wrong following the July 2018 award notice.

24. Miss S contacted the Adjudicator’s Office to complain about HMRC’s actions. It did not uphold her complaint as it felt the evidence suggested she had not complied with Code of Practice 26.

27. Tax credit overpayments can happen for a number of reasons, as set out in COP26. There is no right of appeal against HMRC’s decision to recover any tax credit arrears. When HMRC considers complaints about the recovery of tax credits, it does so in line with COP26. It considers the information customers provide on their claim form before taking into account the customer’s obligation to check the accuracy of their award notices, including the level of income on which their award is based. It also looks at whether customers have provided information about changes of circumstances in a timely manner and whether HMRC has met its own responsibilities.

28. COP26 states that HMRC should ‘accurately record and use the information [customers] give [it]’ to work out their tax credits and pay it the correct amount. Where a customer highlights a mistake in an award notice, HMRC should put it right and send a corrected award notice.

29. Customer responsibilities set out in COP26 include providing ‘accurate and up to date information’ as well as informing HMRC of any changes in circumstance throughout the year. It also asks that customers check their award notices against the provided checklist to ensure that everything is accurate. Where that is not the case, or they disagree with the details of an award notice, it asks that they tell HMRC within 30 days so that it can be amended. COP26 also states that if a customer wishes to dispute an overpayment, they must do so within three months of receiving the final award notice.

30. Miss S complains that HMRC failed to act on information she says she provided in early 2018 about her increased household income and that this failure to act resulted in an overpayment.

31. Miss S’s responsibilities, as set out in COP26, required her to provide accurate and up to date information as well as informing HMRC of any changes in her circumstances such as increases/decreases to her household income. She has advised that she started a new job in January 2018 which paid £42,680 as opposed to the £22,001 she had previously been earning. This was a significant increase in earnings and would have meant she no longer qualified for her tax credits.

32. The available records do show that she informed HMRC of a change in circumstances because she told them she had started a new job. However, nowhere in these records does it state she informed them of her significantly increased income until July 2019, the following year.

33. Miss S’s other key responsibility set out in COP26 is to check all award notices they receive and ensure they are accurate. HMRC issued an award notice in March 2018 following a digitally reported change of circumstances. This award notice was based on an income of £22,001 which was clearly now incorrect. It was Miss S’s responsibility to check this information and inform HMRC of the error at that time. As above, the records do not suggest she provided information about her increased income until the end of July 2019, the following year.

34. Miss S provided HMRC with a copy of her phone bill which she states indicated she contacted it in early 2018 to inform HMRC of her increased household income. It appears that the number she called (0300 200 330) was HMRC’s income tax helpline and not its tax credit helpline and this number would have been unable to assist her regarding changes to her circumstances.

35. HMRC was unable to find records of the calls she highlighted from March and April 2018. The system also held no written notes saying she had called to discuss her increased income. It therefore appears that there is no impartial evidence other than Miss S’s recollection of events to suggest she contacted HMRC to specifically, and directly, discuss the increase in her household income, and she had a responsibility to do this in line with COP26.

36. Given the evidence available, we cannot say that HMRC failed to act on information she provided in early 2018 as records of those calls simply do not exist. Miss S’s evidence equally does not suggest she contacted the correct department at HMRC but rather the income tax team who would have been unable to help.

37. Even if records of these call did exist though, when HMRC issued its amended award notice in March 2018 and then its final award notice for the upcoming 2018/19 tax year in July 2018 it became Miss S’s responsibility to review it and inform HMRC of any errors (such as incorrect household income), in line with COP26. She did not until July the following year and, at that point, she had already incurred an overpayment.

38. For these reasons, we consider that HMRC was right to say the overpayment remains recoverable and have decided to take no further action.

1. We have carefully considered Miss S’s complaint about HMRC.

2. We recognise how frustrating her dealings with HMRC have been and the difficulties she experienced as a result of the Child Tax Credit overpayment. We understand it is distressing to have to repay a debt she believes could have been avoided.

3. From the evidence available, we consider that HMRC appropriately complied with its responsibilities, set out in its Code of Practice for tax credit overpayments (COP26), as we do not consider its actions or omissions were the cause of the overpayment.