When NHS worker Aneita Lewis reduced her hours to care for her daughter, 4, she never realised she’d be blacklisted from credit and sent a £5,000 tax bill from Inland Revenue.
It led to a year of sanctions and an eye-watering charge for childcare costs she never received – leaving her confused and chasing HMRC for answers.
The mum-of-one was working as a healthcare administrator in 2016 when she had to reconsider her hours.
She was working full time and received tax credits and working tax credits to help keep on top of her essential bills at the time.
Aneita claimed childcare through a salary sacrifice scheme offered by the NHS.
However, when she changed her hours from 37 a week to 12, everything changed.
The mum said her tax credit payments were suspended and she was sent a £5,000 bill from HMRC.
“It wasn’t making any sense because I actually contacted them to let them know if my change in circumstances and did all the maths myself at the time,” she said.
She was told her tax credits would be stopped due to her being ‘overpaid’ and was told to repay £5,000 in childcare costs despite never claiming this support from the government. Aneita was completely confused.
“I got a letter saying I owed them £5,000 in childcare costs - but I never actually claimed anything from them in childcare,” she said.
“I tried to explain this to them but all I got was demand letters.”
Months went by and eventually she contacted charity Turn2Us for advice.
“My life changed overnight,” she said. “There was a big bill to pay. My tax credits had been withdrawn and I was effectively sanctioned.”
It left her with £400 to survive on a month – and within weeks they were relying on their local food bank.
At the same time, Aneita told the Mirror it also felt like “bailiffs were hounding you” as she described being chased by HMRC.
“I’m just a normal person that did nothing wrong, it was hard to understand.”
She said letters just kept arriving “demanding the money”.
Eventually Aneita made a Subject Access Request. This allowed her to obtain paperwork on her file from the Department for Work and Pensions which she could use to prove she paid for her own childcare.
“This proved I was salary sacrificed,” she said. “I was paying for my own childcare.”
A HMRC investigation later discovered that their computers wrongly stated that her tax credits included childcare support.
This meant that when she reduced her hours, she no longer qualified for it, hence why she was asked to pay it all back.
“I was assessed based on my income and was told that I’d receive that money because I’m a single parent. It was supposed to help me feed Olivia,” Aneita told The Mirror.
HMRC finally admitted they were at fault but they continued to suspend Aneita’s payments despite knowing she had not received childcare support.
The tax authority told Aneita that her payments would not be reinstated until the following April – because she had ‘claimed her allowance for the year’.
She had to apply for a debt relief order to help pay for food.
“I applied for a £90 debt relief order and met with a jobcentre advisor – that felt like the only option. It meant my disposable income would be capped at £50 a month for a few years but that felt like the only option as I could not keep up with food, phone bills, essential costs, TV licence and my credit card loans on just £400 a month. I was trapped.”
Today, she continues to pay the price the price for the error.
Have you been send a historic working tax credit bill? Get in touch: emma.munbodh@mirror.co.uk
“I can’t get credit all these years later because I told out the debt relief order. Lenders won’t go anywhere near me.
“It’s scarred me financially for the next six years.”
HMRC eventually wiped the penalty due and agreed to compensate Aneita.
A HMRC spokesperson said: “We are sorry for an error in Ms Lewis’ Tax Credits in 2016 that meant she incorrectly was told she had received an overpayment. When we became aware of this we rectified it as soon as possible and paid compensation.
“We want all our customers to receive the money they’re entitled too so if something goes wrong we put it right.”
In the past four years, HMRC has written to 2.2million people over historic working tax credit overpayments – it is not known how many more of these might be incorrect.
For many families affected, the money will be automatically withdrawn from their Covid Universal Credit allowance.
Sara Willcocks, head of external affairs, at charity Turn2Us said families are too often being caught out by benefit computing errors.
She warned it’s pushing distressed families into debt and homelessness.
"Using the benefits system to claw back overpayments, often due to HMRC error, is unjust and impractical. Benefit levels are already critically low; deducting anything will increase the likelihood of poverty, debt and homelessness.
"We urge the government to consider wiping these debts. If recouping this money is such a priority, they need to do it in a much more affordable way. Anyone who may be affected by this issue can and should challenge the decision."
