Tax credits are given to families to top up their income in the form of child and working tax credits. However, many families find that because of a change in their circumstances, they have tax credit debts. This can cause stress and distress but Debt Support Trust can help.
If you would like help with your tax credit debts, please call our helpline on 0800 085 0226 for debt help.
Tax Credit Debts from Overpayment
The debts to the HMRC tax credit department can vary from hundreds to thousands of pounds. When HM Revenue and Customs reevaluate your account they may inform you that you've been overpaid. Last year over 1.5 million people fell into this problem. The Government overpaid £1.5 billion in the year 2012-2013 to people claiming tax credits.
New powers which will be introduced in 2015 will mean HMRC can take the money from a person's bank account. In the meantime, HMRC can refer the debt to debt collectors who are taking action to recover the money.
The first stage from HMRC is to ask for the money back. They will write and call to make an arrangement to get the money back. You won't be asked to repay the money in one payment if you can't afford it, but usually will be asked to create a payment plan.
When you create the payment plan you won't usually face the threat of debt collectors, but if you fail to make contact with HMRC they could take further action.
HMRC Debt to Tax Credits
If you are struggling to repay tax credit debts along with credit cards, overdrafts and loans then you're not alone. Thousands of people contact Debt Support Trust with debt problems and we're able to assist them back to a debt free life.
If you need help with any element of tax credit advice call our helpful money advice team on 0800 085 0226. We'll be glad to help you with your query.