Well it turns out that my sister had been overpaid Tax Credits in 2003-4 and 2004-5. Somehow HMRC understood that she was receiving the highest rate of the care component of Disability Living Allowance and so was entitled to the ‘severe disability’ element of Tax Credits.

Fortunately, she’s not disabled enough to receive the highest care component of DLA, merely the middle rate. However, this means she was only entitled to the ‘ordinary disability’ element of Tax Credits. So it seems fair enough that HMRC should want the severe disability element back.

Indeed, when I reread her TC award letters for 2003-4 and 2004-5, I saw that HMRC had said ‘We’re paying you the severe disability amount – please check to see if you still qualify.’ No-one did, and I missed it when I first looked into this situation in January 2006.

However, nothing to do with Tax Credits is ever as simple as it should be. The amount HMRC asked to be repaid in the phone conversation is over £100 less than what they said was overpaid at the end of 2005 and 39p less than the amount for which they sent demand notices in early 2006.

So, after a fairly strenuous* weekend back in Worcester during which I verified I had copies of all of my sister’s TC, DLA and other documentation and checked that she had received the amounts HMRC claimed she had, a letter saying ‘I now understand why I have to repay you: please tell me in writing how much and please confirm this will eradicate all overpayment for 2003-4 and 2004-5’ is on the way to HMRC by recorded delivery.
*I also backed up and reinstalled my dad’s PC from scratch, sorted a problem with my mum’s mac and extricated my G4 ‘quicksilver/wind-tunnel*’ mac from my parents’ loft so it could come north. It’s now nestling in my hostess’ desk-unit, blowing raspberries at her PC.
**The quicksilver G4s were noisy to begin with. Adding in two extra hard disks and a zip drive hasn’t made Freddie any quieter.

So far, I haven’t had to delve into 2005-6. That year’s TC may be marred by the now-overturned dismissal and the subsequent cessation of TC payments. Until about halfway through this year, TC was paid via employers. My sister has kept all her wage-slips and it’s easy to see how much TC she received this way. However, TC is now paid direct to the recipients’ bank accounts. My sister has a passbook bank account. When money is paid into it, the passbook entry simply says ‘BGC £23·99’ or similar. The bank claims that they can’t trace where such payments come from. I can’t understand this and have challenged them about it several times but they have stuck to this story.

So there appears to be no way of telling which deposits are wages, which are Tax Credits, etc, without a very laborious trawl through every entry in the book, comparing entries agains wage-slips, DLA documents and the like. Also for 2005-6, there is no TC award letter at the beginning of the year saying ‘this is what and how we intend to pay you for this year – we’ll square up at the end of the year.’ (They start by assuming a recipients’ wages will be the same as the previous year. When the recipient’s earnings for the tax year are known, this is declared on an annual review form. HMRC then use this information to calculate the initial payments for the year that’s just started and make any payments owing for the year that’s just finished.)

So without this initial award letter, I haven’t a hope of checking that my sister has received what HMRC say she should have. I’m so relieved I don’t need to – yet!

2006-7 and 2007-8 are OK – I’ve been involved with every step and I’m confident that my sister has received what HMRC say she should.

I’m concerned for the many folk in my sister’s situation who don’t have someone numerate and with a reasonable understanding of HMRC-english to help them. I’m also a bit embarrassed I didn’t appreciate this side of my sister’s needs before a year or so ago.

On a positive note, some of the ‘babies‘ are blooming. The gerania, in particular, have beautiful pinky-red foliage that gladdens my heart. Pix to follow as and when…