Monday, 6 April 2015

NED News Adviceline: Spring 2015

HMRC has just contacted me to say that I owe them money as they have overpaid my Tax Credits. I didn’t realise that this could happen, and I don’t have enough money set aside to pay them back. What should I do?

Tax Credits are designed to give working people a little bit of extra income to help guarantee a decent standard of living from work.

Unfortunately, the system by which entitlement to Tax Credits is decided is complicated and can often lead to people falling into debt when they are asked to repay money they’ve wrongly been given by HMRC.

Tax Credits are gradually being phased into the Government’s new Universal Credit system, which is intended to reduce Credit miscalculations and overpayments.

However whilst we wait for the system to change, problems with the current process seem to be getting worse. Last year, Citizens Advice across England and Wales saw a 14 per cent increase in problems relating to debt caused by Tax Credit overpayments.

The combination of pressures on people’s living costs means that being asked to repay Tax Credits at the end of the year can be a real blow. Sky-high energy bills, expensive childcare and wages which are still failing to keep up with costs mean that it can be a real struggle for households make ends meet. The last thing hard-pressed households need is for HMRC to put them in more debt.

Often, HMRC will be willing to work with you to see what you can afford to pay back, but in many cases, poor communication and delays by the agency have led to our clients struggling to get a fair outcome.

If you’re struggling with debt then it’s important to take steps to get on top of your bills. Debt can seem impossible but there’s always a way out of problems.

If you come to us, we will be able to work out a debt management plan with free and impartial advice.

I have been struggling with my finances for a while, and now it’s got to the point where I can’t afford bills like council tax or my mortgage. I’m worried that if I can’t find a solution soon, I might have to sell my home. What can I do?

The months after Christmas can be particularly tough with extra expenses over the festive period putting even more pressure on household budgets. If you are facing New Year debts don’t panic. With the right help there are ways to get on top of your outstanding bills.

Firstly, the earlier you get help with debt problems the easier it is to get them sorted. Trying to carry on as if everything is normal can make things worse, as debts can pile up quickly. Letting your creditors, like your mortgage company or local council, know if you will be unable to pay them is key. Creditors should consider reasonable repayment plans and may be able to offer you more time to pay.

It is important that you prioritise paying certain debts, such as the rent, mortgage or energy bills, first to keep a roof over your head and the heating on. Depending on your circumstances you may be able to get support through benefits, so it is worth checking this with the Department for Work and Pensions. If you are unable to pay your council tax debt the local authority may agree to let you pay a reduced payment over a longer period or even in exceptional circumstances write off the debt, but you will have to keep paying your ongoing bill going forward.

Drawing up a proper budget of your expenses can help identify areas you can cut down on. Before you turn to a loan to cover costs, think carefully and find out what this means for any future repayments and interest that will be due on the loan. Citizens Advice Bureaux offer free, confidential and independent advice, can help work out costs and negotiate with your creditors, and may be able to help you get debt-free by looking at appropriate options available for you.

Someone has been going from door to door on my street and I’m concerned they might not be a legitimate trader. What should I do?

As a general rule it is worth trusting your instincts — if an offer sounds too good to be true, it probably is.

Scammers often use cold calling and doorstep sales to target victims, so before agreeing to anything or signing anything first tell someone you trust about the offer. Having this conversation with a family member, friend, or a good neighbour could stop you from losing money.

If a trader is offering you a deal take a moment to check out their details. Ask the trader if they belong to a professional organisation, such as TrustMark, and if they say they do, then phone the organisation or look on their website to check this is true.

Don’t agree to a deal on the spot that you have any reason to doubt. Legitimate traders should be happy for you to take their details and say you need more time to make a decision. Avoid handing over money before a job is started. A reliable trader won’t ask you to do this as they should have the money to cover materials until they are paid.

If you are concerned about an offer, think you may have been caught out by a rogue trader, or are concerned for a neighbour, you should call the Citizens Advice Consumer Service on our helpline on 03454 04 05 06. If you’ve fallen for a scam, report it to the Police and you can also report it to Action Fraud.

For further advice call North East Derbyshire CAB or visit your nearest bureau. See our website for details.