The Chartered Institute of Taxation has reminded tax credits claimants that they may be able to keep overpaid credits that the Inland Revenue seeks to recover. We can sort out your tax for as little as £125 (fully inclusive). Many people will have been either underpaid or overpaid for the tax year 2003/04 because the credits paid in that year were based provisionally on income received in 2001/02. The renewal of claims involves checking the provisional payments against claimants' income for 2003/04. The CIOT said that while the Revenue would normally ask claimants to repay excess credits, repayment was not always necessary. Anne Redston, chairman of the CIOT personal taxes sub-committee, said an overpayment did not have to be paid back if it was the result of the Revenue’s mistake and the claimant could reasonably believe that the tax credits were correct. The CIOT said it was pressing the Revenue to publish details of the errors contained in the original guidance it provided with the tax credit claim form. For example, the guidance indicated that farmers' income should be averaged, as it is for income tax. "This is not the case, so a farmer who relied on this guidance will not have to repay the overpayment", the CIOT said. The Revenue published a form TC846, 'Request to reconsider recovery of tax credits', on its website last month. The CIOT advised that anyone who thought they should not have to repay their overpayment should contact the Revenue and ask for the form. Although no mention of the form TC846 was made in the recently updated code of practice COP26 on overpayments, the Revenue said it had been available for several months. A spokesman said it was "issued by the Tax Credit Office whenever claimants who have received revised award notices have asked that we reconsider whether they should be expected to repay an overpayment". The Revenue added that the form had become available recently, on request, from the leaflet orderline: 0845 9000 404. Andrew Goodall
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