Bbc News 24 - Tax Credits

[Democorruptcy]

I've just seen a story about Tax Credits on the BBC News and couldn't believe it.

They said that if someone's income changes no more than £25k between years they are not liable to pay any overpayment back.

So someone could get a new job that pays say £34k and still be able to claim tax credits based on an old salary of £10k? Unbelieveable!

It's true:

HMRC may have paid you too much because they thought your income is lower than it actually is. Normally, if your income for this year is no more than £25,000 higher than it was last year, your award will not be affected. But there are still some rises in income that are not covered by that ‘buffer zone’

http://www.advicenow.org.uk/advicenow-guides/problems-with-benefits/tax-credit-overpayments/why-have-i-been-overpaid,10212,FP.html

So does this mean that if their salary stays at £34k they could keep claiming as if still on £10k in subsequent years?

[Bruce Banner]

Yup, the "poor" people on tax credits are not expected to estimate their annual earnings closer than the nearest £25,000 .

[erat_forte]

I've just seen a story about Tax Credits on the BBC News and couldn't believe it.

They said that if someone's income changes no more than £25k between years they are not liable to pay any overpayment back.

So someone could get a new job that pays say £34k and still be able to claim tax credits based on an old salary of £10k? Unbelieveable!

It's true:

So does this mean that if their salary stays at £34k they could keep claiming as if still on £10k in subsequent years?

No it's assessed on the previous year's award

Used to be 5k I think but too many people were getting bills after going over the limit

And people seem to be incapable of saving - if my income went up 5k I would damm well make sure the bulk of that increase went into savings rather than eating out and ipads.

The whole system stinks, a soviet beurocrats wet dream. Bring on the Universal Credit.

[Democorruptcy]

The BBC item featured a woman who had been overpaid £2k and had to pay it back at £40 a week. It ended by portraying the woman as some sort of victim. She walked outside her house that had been put up for sale sign by implication as a result of her having to pay the money back.

Looking at the rules on the link I posted

1) Had she earned more than the £25k buffer this year?

2) I would bet the woman had been overpaid because of a change in circumstance, i.e perhaps acquiring a chap and not informing HMRC about her change of circumstance. Now she is probably moving in with him so her house is for sale.

The whole point of the story was to tug heartstrings that the £25k buffer is going to be reduced to "just" £5k next year so will result in lots more people being overpaid. As if it isn't fair they cannot claim more than they are really entitled to. Good grief what a state this country is in.

[poppyoscoe]

A Mum at school has openly bragged that to pay off £20k of credit card her other half doesn't know about she has told HMRC that they have separated so she has gone from receiving zero tax credits due to his salary level to getting £5k+ in tax credits. Bad enough except she is using this money to buy stuff for her already thoroughly spoilt and obnoxious children such as trampolines, designer clothing and ipods and worse still botox for herself - and hasn't paid of a single penny of the credit card debt. Her other half who used to work for the same company as my husband appears to know nothing of this at all judging by a recent conversation my husband had when he bumped in to him which tallies with what she says of intercepting all the mail and shredding anything she doesn't want him to see!!

Oh how I hope they catch up with her - wish I was brave enough to snitch on the chavvy b*tch!!

[lowrentyieldmakessense(honest!)]

A Mum at school has openly bragged that to pay off £20k of credit card her other half doesn't know about she has told HMRC that they have separated so she has gone from receiving zero tax credits due to his salary level to getting £5k+ in tax credits. Bad enough except she is using this money to buy stuff for her already thoroughly spoilt and obnoxious children such as trampolines, designer clothing and ipods and worse still botox for herself - and hasn't paid of a single penny of the credit card debt. Her other half who used to work for the same company as my husband appears to know nothing of this at all judging by a recent conversation my husband had when he bumped in to him which tallies with what she says of intercepting all the mail and shredding anything she doesn't want him to see!!

Oh how I hope they catch up with her - wish I was brave enough to snitch on the chavvy b*tch!!

has she had her boobs done

[XswampyX]

Awwwww these poor 'Victims' :angry:

Voices of the Victims

Official HMRC figures show that, from 2003 until April 2008, there have been 8,364,000 claims overpaid by a total of £7,093,000,000. That is seven billion and ninety-three million pounds! Statistics for 2008-2009 will probably not be released until May 2010, but you can expect the figures to increase by well over a million claimants, who have been overpaid by yet another one billion pounds.

It's a fantastic system. If people won't borrow then give them free money then put in the small print that you 'might' want it back in a few years. What a great way to stimulate the economy..... until it has to be paid back.

Oh and why the ****** is somebody earning an extra 25,000 pounds in a year doing claiming tax credits?

[Democorruptcy]

It shook me to my boots that BBC item and I was intrigued to see what sort of amount people are allowed to trouser from taxpayers using the salary buffer

There is a calculator here:

http://taxcredits.hmrc.gov.uk/Qualify/DIQHousehold.aspx

I put myself as a 22yo woman with 2 children in childcare earning £12k for 30 hours work.

Tax credit = £10,900

Then I did the same except earning £34k

Tax credit = £4,900

So a £6k overpayment no questions asked.

[poppyoscoe]

has she had her boobs done

Ah now this is a subject of playground discussion - some think she has but I suspect a push up bra!! Not sure she has "earnt" enough tax credits to pay for one yet!!

[interestrateripoff]

Apart from trying to win votes why pick it to the nearest £25k?

Perhaps they should do the same with speed cameras?

[jaynewcastle]

The Govt have been paying out tax credits to those earning up to £66k for 7 years now, old news really

[RufflesTheGuineaPig]

Apart from trying to win votes why pick it to the nearest £25k?

Perhaps they should do the same with speed cameras?

Speed to the nearest 25k: 0mph

[needsleep]

The Govt have been paying out tax credits to those earning up to £66k for 7 years now, old news really

Yep. We have joint income of approx £60k and my wife has been insisting on claiming it. I never seen the point - some years the credit has been £80, so little that they just pay us a lump sum in April and no more for the rest of the year. Persuaded her not to bother this year.

[futurepaul]

Plus maintenance from husband to wife is not a taxable income so is not included in the calc.

I know first hand One of my exes had 3 kids a part ime job, 80% equity house and 30k pa plus in maintenance. Her income was more that mine with all the bolt ons.

When I went to live with her it cost her nearly a grand a month in lost benefit due to my wage being a accountable income.

Absolute F-ing madness that one women could claim so much she didn't need. She was a bit embarissed but somehow managed to live with the guilt

[Caribbean Beauty]

The biggest problem with tax credits is that it is so open to fraud. There are various frauds which Brits can do, but these won't usually net very large sums if only the single real identity is used.

However, the biggest fraud is committed by foreigners - eg eastern european migrant workers, african asylum seekers and so on - they come in, get their NI numbers and little jobs OK, register the kids for child benefits, claim working and child tax credits to the max based on very low part time earnings.

Then, hey presto, they disappear back home overseas - those going to poor third world countries canlive like kings and queens on 10k-15k tax credits and child benefits combined, while those heading back to eastern europe also do OK, plus then get jobs back home in top.

Once a year their pals back home at their given address (or at a UK address to which a mail forward has been setup) forward the annual renewal questionnaire to them overseas. They complete it and return it back via the Uk friends who mail it on. The fraud requires a self-employed job to be declared - eg window cleaner, builder etc. It also requires an annual tax return to be submitted too - but this is even easier as it can be done online, and if less than the personal allowance is entered there is no tax bill to pay.

You lot should be paying me for these moneyspinning gems! But I reckon we are losing a fair slice of wonga to such frauds, in the billions. If they scrap the whole system and introduce a universal credit it may help, but there has to be some method of checking people have not left the country, regularly.

[jaynewcastle]

It is very easy to fraudulently claim Tax Credits as Carribean Beauty has advised, especially as HMRC staffing levels have fallen by 30% in the last 4 years & the public wanting even more cuts. The teams which investigate fraudulent claims have had their numbers slashed, which means far fewer claims can now be reviewed.

[porca misèria]

The biggest problem with tax creditscomplexity in taxation is that it is so open to fraud.

Fixed. Tax credits are just one avenue for fraud and corruption in our system.

[Harry Sacks]

To those of you whinging about this - Tax Credits get spent into the economy, buying products/services you or your employer supplies.

[Democorruptcy]

To those of you whinging about this - Tax Credits get spent into the economy, buying products/services you or your employer supplies.

What do you want to do then? Abolish any limits and just give people whatever they ask for?

[endgame]

To those of you whinging about this - Tax Credits get spent into the economy, buying products/services you or your employer supplies.

They also flow into assets such as gold, silver and housing, food etc. The helicopters have been flying for over 10 years now, dumping cash in the form of "tax credits". Highly hyper-inflationary.

[CrashedOutAndBurned]

I've just seen a story about Tax Credits on the BBC News and couldn't believe it.

They said that if someone's income changes no more than £25k between years they are not liable to pay any overpayment back.

So someone could get a new job that pays say £34k and still be able to claim tax credits based on an old salary of £10k? Unbelieveable!

It's true:

So does this mean that if their salary stays at £34k they could keep claiming as if still on £10k in subsequent years?

The system is full of perverse outcomes. Say a worker decides to do a load of extra overtime one year, next year their payments could be slashed, rendering the extra work pointless.

Taxing labour is stupid enough, but tax credits make it all the more stupid.

[miko]

The biggest problem with tax credits is that it is so open to fraud. There are various frauds which Brits can do, but these won't usually net very large sums if only the single real identity is used.

However, the biggest fraud is committed by foreigners - eg eastern european migrant workers, african asylum seekers and so on - they come in, get their NI numbers and little jobs OK, register the kids for child benefits, claim working and child tax credits to the max based on very low part time earnings.

Then, hey presto, they disappear back home overseas - those going to poor third world countries canlive like kings and queens on 10k-15k tax credits and child benefits combined, while those heading back to eastern europe also do OK, plus then get jobs back home in top.

Once a year their pals back home at their given address (or at a UK address to which a mail forward has been setup) forward the annual renewal questionnaire to them overseas. They complete it and return it back via the Uk friends who mail it on. The fraud requires a self-employed job to be declared - eg window cleaner, builder etc. It also requires an annual tax return to be submitted too - but this is even easier as it can be done online, and if less than the personal allowance is entered there is no tax bill to pay.

You lot should be paying me for these moneyspinning gems! But I reckon we are losing a fair slice of wonga to such frauds, in the billions. If they scrap the whole system and introduce a universal credit it may help, but there has to be some method of checking people have not left the country, regularly.

This abuse of our country is so wrong .

Even if these people did not got back home and stayed here we can not afford to just keep handing out money to new arrivals. When immigration is bought up and people ask why so many more people are allowed into this country , we get told things like the immigrants are working and paying for your pensions they make a massive + contribution to the country .

I do not buy this cr-p any longer.

[SarahBell]

The whole tax credits system is barking mad.

They used to do it based on your salary for 6 months ... so on what you'd actually earnt. But they discovered that the hard working sods would do overtime once this period was over and up their salary ... and then stopped doing the overtime for when it came to the next measured period.

I think someone has already mooted a return to that system.

(Which does actually favour people prepared to do some overtime)

[Tonkers]

It is so obvious they should scrap the credits and just lower taxes, it's infuriating!

[endgame]

It is so obvious they should scrap the credits and just lower taxes, it's infuriating!

Scrap the tax credits and the system will implode. Rents, mortgages, electric, gas, council tax, credit card etc etc wont get paid. It will all have a knock on effect leading to deflation, so hyperinflation it is then since deflation can be fought with money "printing" tax credits. Those who can pay will be made to pay for those who cant. For example, electric bills will go up to cover the cost of those who default.