HM Revenue and Customs

2. Mr A complains HMRC is asking him to repay a tax credit overpayment he believes comes from a fraudulent claim by his ex-partner. He says he should not have to repay the overpayment as he was not involved in the claim. Mr A tells us the issues have caused significant distress and made his physical and mental health worse.

3. Mr A wants HMRC to accept he does not owe the money.

4. Tax credits are a benefit that gives financial help to people on low incomes. The amount of tax credits someone receives is dependent on their total household income. The higher the income, the less benefit received; the lower the income, the more benefit received. Two people can make a joint application for tax credits.

5. HMRC sometimes carries out compliance reviews of tax credits awards (reviews to check that the right amount tax credit is being paid). If it does this, it can ask claimants to provide details about their circumstances. If they do not do this, the claim can be cancelled and the claimants may have to pay back the tax credits they have received.

6. On 4 August 2012, HMRC received a joint application from Mr A and his ex-partner (Ms L) for tax credits. They both lived at the same address. Between September 2012 and July 2013, HMRC made payments into Ms L’s bank account.

7. On 1 July, HMRC wrote to Ms L and asked her to confirm her employment details but she did not respond. HMRC later received information from her employer that she had left her job in August 2012. This meant the tax credit award should have ended in September 2012 (due to a four-week run-on period) but HMRC had already made payments up to July 2013. This resulted in a tax credit overpayment of £4,122.77.

8. On 7 August, HMRC sent a final decision notice to Mr A and Ms L which advised an overpayment was outstanding. The letter had mandatory reconsideration rights, which means they could ask for the decision to be looked at again.

9. On 20 August, Ms L contacted HMRC and said her relationship with Mr A had ended. Staff told her the claim had already ended as there was no response to the letter asking for her employment details.

10. HMRC then wrote to Mr A and said he was no longer entitled to tax credits. The letter contained information about the overpayment.

11. On 2 July 2015, HMRC wrote to Mr A and said it had not received any money to pay off the overpayment. It asked him to get in touch to pay or to let them know he was struggling to do so. There was no activity on the case for some time.

12. On 15 October 2020, HMRC wrote to Mr A about the overpayment and said it had not been paid off. He responded and said he had no knowledge of the claim and believed Ms L had submitted it fraudulently. On 9 November, HMRC told him no dispute about the overpayment had been received within three months of him and Ms L being notified of it so no action could be taken now. Mr A told HMRC he never received the letters.

13. In November, HMRC passed Mr A’s allegation of fraud to its disputed household team. They contacted Mr A on 30 December and asked him to provide evidence to prove the claim was fraudulent, such as him working abroad when the claim was made.

14. Mr A’s evidence was him disputing he had signed the documents or received any letters. He said no money was ever paid to him and he never used it.

15. On 26 January 2021, HMRC told Mr A it had considered his evidence but it was not enough to change his liability. HMRC said he and Ms L lived at the same address when the claim was made and it was a joint claim so he shared responsibility with Ms L for the overpayment. This was regardless of whether he received any payment directly into his bank account. It told him this again on 17 June.

16. Mr A raised a complaint via his MP. HMRC reiterated its position a further two times. Mr A then complained to the AO.

17. The AO did not uphold his complaint. It told Mr A it could not decide whether Ms L had submitted the claim fraudulently as this was a matter for the police and the courts. The AO said it could only consider whether HMRC had followed its guidance after Mr A made the allegation of fraud. It concluded HMRC correctly sent the dispute to its disputed household team who gave Mr A the opportunity to provide evidence to prove his claims. They reviewed the evidence and decided he was responsible to pay half of the overpayment back.

18. The AO explained that HMRC guidance says each claimant in a joint claim is responsible for paying 50% of an overpayment. It said that, in line with COP26 guidance, HMRC is required to issue award notices within 30 days of decisions being made. It said HMRC sent letters to the address on file addressed to Mr A after it learned about the overpayment but it was not responsible if these letters were kept from him. The AO concluded HMRC met its responsibilities and was rightly asking Mr A to pay the money back.

21. In cases where a second-tier complaint handler, such as the AO, has already considered a complaint, our general approach is to first consider whether they carried out a fair and thorough investigation. This is to avoid repeating work that has already been carried out robustly.

22. The AO should have carried out its investigation in line with our Principles. They say organisations should properly balance evidence and consider everything relevant to a complaint. They also say, if the complaints procedure is not the most appropriate way for a customer to take their concern forward, public bodies should clearly direct them to the most appropriate way.

23. Mr A complains HMRC is asking him to repay a tax credit overpayment he believes comes from a fraudulent claim from Ms L. He says he should not have to repay the overpayment as he was not involved with the claim. Mr A says he did not receive any letters regarding the claim before 2015 regarding overpayment. He tells us he would have responded to HMRC sooner and would have requested a mandatory reconsideration when the overpayment was first raised in August 2012 if he had received the letters.

24. Mr A is alleging fraud was committed against him by his ex-partner. He has been very specific on that point to HMRC, the AO and us. As the AO explained to Mr A, the complaints process cannot decide whether fraud has been committed. This is something for the police and judicial system and, if Mr A wishes, he is free to contact the police about the matter. This seems to have been appropriate advice from the AO and we believe it had reasonable grounds not to consider this point. It appropriately signposted Mr A to the police, in line with our Principles.

25. As the AO told Mr A, HMRC correctly sent the allegation of fraud to its disputed household team which gave Mr A the opportunity to provide evidence to prove his claims, which he took. They reviewed his points, which were mainly about him not receiving any letters before 2015, and decided he was responsible for paying half the overpayment back. The AO noted the letters went to the address held on file for Mr A. This was a relevant consideration because HMRC can only write to people at a different address if those people contact it to tell it they have moved.

26. The AO correctly explained that HMRC guidance says each claimant in a joint claim is responsible for paying 50% of an overpayment. It said that, in line with the COP26 guidance, HMRC is required to issue award notices within 30 days of decisions being made which is what happened in this case.

27. It appears the AO properly balanced the evidence and considered everything relevant to the case. It considered what action HMRC took when Mr A raised allegations of fraud. It also looked at where the original letters regarding the overpayment were sent, which was Mr A and Ms L’s joint address. The AO then considered the COP26 guidance, which outlines when HMRC can write off debts. Overall, it appears the AO investigated Mr A’s complaint in line with our Principles. Mr A clearly disagrees with its conclusions, but disagreement is not, in itself, enough to show something has been done incorrectly.

28. Mr A has essentially made the same complaint to us that he made to the AO. We fully recognise why he is so upset about these events. It seems clear the underlying issues here are Ms L’s actions and whether or not she committed the fraud as Mr A believes. That is the root of this complaint and a decision on that issue would resolve this case. As mentioned earlier, it appears the best route for Mr A to take would be via the police and judicial system.

1. The Parliamentary and Health Service Ombudsman has carefully considered Mr A’s complaint about HM Revenue and Customs (HMRC). We have seen no signs anything went wrong in the Adjudicator’s Office’s (AO) investigation. As we see no need to repeat an already thorough investigation, we have decided to take no further action. We are sorry to hear of the circumstances surrounding the complaint and the distress the events have caused Mr A.