The Low Incomes Tax Reform Group (LITRG) has urged tax credit claimants to check their 2012/13 final award notices in order not to lose their right to challenge any overpayments. The call comes as HMRC introduced two new changes which will affect anyone wanting to dispute a tax credits overpayment: first, claimants now only have three months to dispute any overpayments; and second, HMRC will no longer stop recovery of an overpayment whilst they consider a dispute.
Under the dispute process, if HMRC has made a mistake and failed to meet their responsibilities but the claimant has met all of theirs, then HMRC will ‘write off’ the overpayment debt and the claimant will not have to repay it. Until 6 April 2013, disputes could be made at any time but, from 6 April 2013, HMRC introduced a three-month time limit.
Anthony Thomas, chairman of the LITRG, said: ‘For this year only, the time limit will apply to all overpayments shown in the 2012/13 final award notice. It is not always very easy to tell if there is an overpayment or in which particular year the overpayment arises. The important thing is that if the award notice shows any overpayment and the claimant wishes to dispute it, then the dispute must be lodged with HMRC within three months of the date on that final award notice.
‘HMRC’s intention is that once the three-month time limit expires, claimants will lose the right to dispute overpayments from April 2003 to 5 April 2013, unless there are exceptional circumstances as to why it was not possible to dispute the claim within three months. There is an alternative to the dispute process which allows an award to be changed if it is wrong due to HMRC error and the claimant did not materially contribute to the error.’
The Low Incomes Tax Reform Group (LITRG) has urged tax credit claimants to check their 2012/13 final award notices in order not to lose their right to challenge any overpayments. The call comes as HMRC introduced two new changes which will affect anyone wanting to dispute a tax credits overpayment: first, claimants now only have three months to dispute any overpayments; and second, HMRC will no longer stop recovery of an overpayment whilst they consider a dispute.
Under the dispute process, if HMRC has made a mistake and failed to meet their responsibilities but the claimant has met all of theirs, then HMRC will ‘write off’ the overpayment debt and the claimant will not have to repay it. Until 6 April 2013, disputes could be made at any time but, from 6 April 2013, HMRC introduced a three-month time limit.
Anthony Thomas, chairman of the LITRG, said: ‘For this year only, the time limit will apply to all overpayments shown in the 2012/13 final award notice. It is not always very easy to tell if there is an overpayment or in which particular year the overpayment arises. The important thing is that if the award notice shows any overpayment and the claimant wishes to dispute it, then the dispute must be lodged with HMRC within three months of the date on that final award notice.
‘HMRC’s intention is that once the three-month time limit expires, claimants will lose the right to dispute overpayments from April 2003 to 5 April 2013, unless there are exceptional circumstances as to why it was not possible to dispute the claim within three months. There is an alternative to the dispute process which allows an award to be changed if it is wrong due to HMRC error and the claimant did not materially contribute to the error.’
