Arun and Chichester CAB answers your questions

EACH month volunteers from the Citizens’ Advice Bureau answer questions from residents. This month its Tax Credits...

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

A. 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, while 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 it can be a real struggle.

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.

Visit one of our centres at Bognor (Town Hall, Clarence Road, 10am to 4.30pm on Mon/Tues/Thurs/Fri, 10am to 7pm on Wed). Chichester (Bell House, 6 Theatre Lane, 10am to 4.30pm Mon to Fri) Littlehampton (14-16 Anchor Springs, 10am to 4pm Mon to Thurs, 10am to 1pm on Fri).