I’m being taken to court following an error with my self-assessment earnings. Do I really need to make these tax credit repayments?

Question – “I, perhaps somewhat foolishly, continued to claim tax credits a few years ago whilst running a self-employed business from home when I was struggling a bit financially. At the time it was the only way I could keep the business afloat.

Now I have the tax credits department on my back trying to reclaim the money from me – around £5,000 which is 3 years’ worth of claims. However, as I had a delayed self-assessment form dating back through this time, I thought that this figure could be wiped away – if not money even could be owed to me so I believed. My accountant was still in the process of going through my paperwork, but I called the tax office and gave them my figures over the phone.

I then received a statement from the tax credits team for the three years and it was obvious that they hadn’t taken down the numbers I gave them correctly. I could clearly see that only one year of my actual accounts had been recorded, whilst there were only estimated figures for the other two years, which meant I still had a bill of £2,000 to pay. After calling them to inform them of their error, they told me that it was too late to make any changes to the figures and that I would need to make the payment.

Now I’m in all sorts of bother – a CCJ has even come through the post and I am due to go to court this week. The tax credits department are still insistent that there is nothing they can do and they cannot alter the figures at this stage. Does this sound fair to you?”

Answer – What sounds unfair generally is unfair. Happily it is not a CCJ that has arrived but a claim and you must defend. They sound to be over the place.

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