TAX Credits are designed to give working people a little bit of extra income to help guarantee a decent standard of living from work. Many people on a low wage or with children can claim them to top up their income, which can make a very real difference to household budgets.
Unfortunately, the system by which entitlement to Tax Credits is decided is complicated and can often lead to people falling into debt when they are asked to repay money they’ve wrongly been given by HMRC.
Tax Credits are gradually being phased into the Government’s new Universal Credit system, which is intended to reduce Credit miscalculations and overpayments.
However, whilst we wait for the system to change, problems with the current process appear to be getting worse. Last year, Citizens Advice across England and Wales saw a 14 per cent increase in problems relating to debt caused by Tax Credit overpayments.
The combination of pressures on people’s living costs means that being asked to repay Tax Credits at the end of the year can be a real blow. Sky-high energy bills, expensive childcare and wages which are still failing to keep up with costs, mean that it can be a real struggle for households to make ends meet. The last thing hard-pressed households need is for HMRC to put them into more debt.
Often, HMRC will be willing to work with you to see what you can afford to pay back, but in many cases, poor communication and delays by the agency have led to our clients struggling to get a fair outcome.
If you’re struggling with debt, it’s important to take steps to get on top of your bills. Debt can seem impossible but there is always a way out of the problem.
If you come to us, as well as looking at whether it is possible to legally challenge the recovery of the overpayment, we will be able to work out a debt management plan with free and impartial advice.
For further information and advice, contact your local Citizens Advice Bureau or see www.adviceguide.org.uk.
Your local bureau – South Worcestershire Citizens Advice Bureau is open:
Monday, Tuesday, Thursday, Friday 10am–4pm, Wednesday (Specialist Debt Advice – by appointment).
Tel: 01684 563611
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