{"id":1858,"date":"2014-01-02T09:59:16","date_gmt":"2014-01-02T09:59:16","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=1858"},"modified":"2019-02-28T12:09:16","modified_gmt":"2019-02-28T12:09:16","slug":"iva-and-tax-credits","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/iva-and-tax-credits\/","title":{"rendered":"IVA and Tax Credits"},"content":{"rendered":"\n<p>If you are insolvent and are considering entering into an Individual Voluntary Arrangement (<strong>IVA<\/strong>) you should check whether you have been overpaid <strong>Tax Credits<\/strong> in the past. <\/p>\n\n\n\n<!--more-->\n\n\n\n<p>Any such overpayment may be entered as a debt in your IVA  proposal provided the overpayment has been \u2018determined\u2019 prior to the  date of approval of your IVA.<\/p>\n\n\n\n<p>For Tax Credit purposes, \u2018<strong>determined<\/strong>\u2019 means that the overpayment was included in a Final Award Notice (FAN) or a Statement of Account (SOA).<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignleft is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-content\/uploads\/2019\/02\/Fotolia_11718894_XS-1.jpg\" alt=\"Tax Credits\" class=\"wp-image-1863\" width=\"343\" height=\"228\" srcset=\"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-content\/uploads\/2019\/02\/Fotolia_11718894_XS-1.jpg 425w, https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-content\/uploads\/2019\/02\/Fotolia_11718894_XS-1-300x199.jpg 300w\" sizes=\"auto, (max-width: 343px) 100vw, 343px\" \/><\/figure><\/div>\n\n\n\n<p>If such a determination has not been made HM Revenue &amp; Customs  (HMRC) are unlikely to include any overpayment as a debt in your IVA  regardless of whether any overpayment is being recovered (or could be  recovered) by restriction of an ongoing Tax Credit award. The reason for  this is that HMRC has no means of readily determining the balance (of  overpayment) due.<\/p>\n\n\n\n<p>Thus HMRC will claim to rank for dividend all (overpayment of) Tax \nCredit determined prior to the date of approval of the IVA. Furthermore,\n HMRC will not claim to rank for dividend any (overpayment of) Tax \nCredit determined after the date of IVA approval, regardless of whether \nit relates to a period prior to IVA approval or not. Such overpayment \nwill be recovered from the debtor by HMRC as a post approval debt.<\/p>\n\n\n\n<p>Where the debtor is married or co-habiting and the other party is \nsolvent and is therefore not entering into an IVA, it is important to \ndistinguish whether the Tax Credit overpayment was made to the insolvent\n debtor or the solvent partner or to both partners jointly. If made \njointly to both parties and if the required determination as to the \nquantum of the overpayment was made prior to the date of approval of the\n IVA, HMRC will enter a claim for the full debt into the IVA and will \nrank for dividend with the claims of the other unsecured creditors. The \nsolvent partner continues to be liable for repayment of the debt as a \nwhole in accordance with the principle of joint and several liability \nand HMRC will pursue repayment from that source, mitigated to the extent\n of any dividend paid from the insolvent partner\u2019s IVA.<\/p>\n\n\n\n<p>Following the approval of the IVA and again provided the quantum of \noverpayment of Tax Credit was determined prior to the approval of the \nIVA then any restriction of an ongoing award of Tax Credit should cease \nand payment of the debtor\u2019s Tax Credit award should revert to normal \nlevel without any deduction in respect of prior overpayment. This is in \ncontrast to Bankruptcy where restriction of ongoing award may continue \nafter the debtor is made bankrupt.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are insolvent and are considering entering into an Individual Voluntary Arrangement (IVA) you should check whether you have been overpaid Tax Credits in the past. <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-1858","post","type-post","status-publish","format-standard","hentry","category-iva-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1858","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=1858"}],"version-history":[{"count":3,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1858\/revisions"}],"predecessor-version":[{"id":3180,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1858\/revisions\/3180"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=1858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=1858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=1858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}