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Tax Credit case summary 3
Mr and Mrs C were overpaid about £1,400 in the 2003/04 tax year and about £1,200 in the 2004/05 tax year. When Mr and Mrs C completed their initial tax credit claim form in February 2003, unfortunately, they omitted Mr C’s income. In April 2003, the TCO sent Mr and Mrs C a form to complete this missing information, which they completed promptly. Unfortunately, when the TCO received this document they failed to act on it. Payments were issued based on the incomplete income information from the claim form and an award notice was issued, clearly showing that the award was based on incorrect information (missing Mr C’s income). Mrs C says that she was aware that the award was incorrect and contacted the TCO on three occasions to rectify this. The TCO only have a record of one of these calls but it is clear that they still failed to act on the information about the correct household income that they were given. The award was eventually corrected in August 2003 but by this time Mr and Mrs C had been paid more than they were entitled to for that year and their payments stopped. There was a further overpayment in the 2004/05 tax year, but this did not arise due to a TCO mistake. It arose because Mr and Mrs C’s actual household income during the year was significantly higher than the income used to calculate their entitlement during the year.
We partially upheld this complaint. Although the 2003/04 overpayment did arise due to a mistake on the part of the TCO, it was clear that Mrs C was immediately aware, from the incomplete income information on her award notices, that their award was incorrect. It is also clear that they were aware that the TCO were continually failing to correct the award, despite the information she had provided. Taking this into account, we felt that Mr and Mrs C had failed the reasonable belief test of COP 26 and that the conditions for writing off an overpayment had not been met. The TCO had already paid compensation to Mr and Mrs C amounting to £105 for their failure to correct the award and their delay in dealing with the overpayment dispute. As a result of Mr and Mrs C complaining to our office, they agreed to pay a further £80, in recognition of what had happened.
