TONY HETHERINGTON: HMRC wants £75 a week from my pension for overpaid tax credits

Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. 

S.M. writes: I was medically retired from Royal Mail in 2015, after 32 years of employment. In 2021, I was told that I had been overpaid Working Tax Credits between 2003 and 2005. 

When I was threatened with legal action, I agreed to a deduction of £4 from my pension. I did ask why it had taken the Department for Work & Pensions and HM Revenue & Customs 18 years to pursue any claim. 

I was told that the money was owed, and that was that. But now they want to collect £147 fortnightly from my state pension, and I am beside myself with worry.

Tony Hetherington replies: Working Tax Credits (WTCs) were launched in 2003 and gained a reputation for being very complex. They were a benefit managed by HMRC and were intended to top up the income of the lowest paid. However, anyone who received a pay rise, a bonus, or who simply worked overtime, ran the risk of being told months or years later that this extra cash meant they had to hand back some of their WTC money.

As claimants had to be on a low income to qualify for WTCs in the first place, the chances of them having a lump sum tucked away to hand back were very slim. HMRC staff were always playing catch-up. The result was a growing list of debtors, and eventually the introduction of the replacement Universal Credits.

In 2021, HMRC handed lots of its records over to the Department for Work and Pensions, and these old files are said to show that WTC overpayments stood at more than £5 billion – of which you owe £1,133, according to DWP officials. They began taking £4 from yours and your wife’s state pension, but decided to speed things up by taking even more! This would cost you nearly £75 a week and leave you unable to pay your bills.

There was no attempt made to discuss your circumstances and a DWP letter bluntly told you: ‘We are writing about money that you need to pay back. We have arranged to take deductions from your benefit to pay this money back.’

I approached officials at both DWP and HMRC, and they agreed that HMRC would answer me for both departments. HMRC told me that it informed you of the overpayments in 2010, but postponed collection because of your low income. Why anyone at HMRC or DWP suddenly decided that as a state pensioner you were better off today than you were in 2010 is a complete mystery.

I pressed HMRC to explain why it had been silent from 2010 to 2021. The explanation is that the tax man made a note in 2010 to review your debt after six months, but failed to do so, and nobody dusted off the records until 2021. And the normal rule that says debts can’t be pursued after six years of silence does not apply to HMRC.

HMRC shrugged off the idea that you could be deprived of a big chunk of your pension. But I made clear that I had a copy of the DWP letter you received, spelling out the savage cut. The outcome though, is that you are now going to be losing just £4 a fortnight. The threat of living on £75 less a week has been lifted, which is great news.

A spokesman told me: ‘HMRC has carefully reviewed Mr M’s case and found the overpayments on his record are correct. DWP is collecting what’s owed in an affordable way.’

But no spokesman could explain why you are better off now than in 2010, and can afford to surrender any of your pension at all.

Car park fee fury 

Ms A.M. writes: I prepaid £39.99 for parking at Luton Airport. I arrived and entered the car park at the allowed time, and returned at the proper time, but I had to pay a further £70 to exit the car park.

I have written to the car park operators Apcoa since then, but I have received no reply.

Tony Hetherington replies: You booked space in the car park for set times and days, and supplied your registration details. Your departure time expired at 11.30pm, and you collected your car at 10.45pm, so you did not exceed your booking. But when you reached the exit barrier it refused to lift.

Fighting for fairness: There was confusion when exiting a car park run by Apcoa

Apcoa told me: ‘Signage at the exit barriers advises customers to push the assistance button if they have pre-booked.’ You told me you had done this repeatedly with no response, before giving up and paying the fee of £70. You then wrote three times to Apcoa’s head office, even getting signed proof of delivery. Apcoa failed to reply.

I invited them to comment, but they offered no reason for ignoring your letters. They said: ‘We have now been in contact with the customer directly and refunded their duplicate payment. We have also refunded their original payment and postage costs as an acknowledgement of the inconvenience.’

A fair outcome, but why is it so often the case that customers have to fight car park firms to get fairness?

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.