How are tax credits worked out
Best Answer: Telephone 0845 300 3900 this is the tax credit helpline, or telephone the number on the letter that you have received asking for the overpayment.
Request (do not demand, be polite) a full explanation as to why they think you owe this amount of money.
The explantion takes about 4 to 6 weeks to arrive. If anybody telphones/visits in the meantime tell them you are waiting for an explanation.
The explanation will then tell you exactly why you owe this money. If you then dispute the explanation telephone 0845 300 3900 and ask for form TC846 Tax Credit dispute form, on receipt complete and return usually you have 7 days to return this form. Then wait. You will have to explain fully why you dispute the explanation.
One major cause of Tax Credit overpayments is that people do not complete the renewal paperwork on time. If the renewal process has not been completed on time (by 31 July following the tax year in question) the tax credit office have the right to cancel the existing claim, and then claim back monies paid out the previous year or the year to which the renewal paperwork is for and payments made on the current in payment claim.
It is VITAL that the renewal process is completed.
For more info on Tax Credits go to the link below
If in any doubt about tax credits telephone the helpline on 0845 300 3900, you can also telephone this number to obtain the address to write to if you wish to make a complaint.Source: uk.answers.yahoo.com