‘HMRC mistakenly gave me £ 775,000 – and it became a nightmare’ | Tax
A woman who woke up to find that more than three-quarters of a million pounds had been deposited into her bank account by HMRC described how she spent a year waiting for him to realize her mistake and get the money back and worried about what would happen when it did.
In August 2020, Helen Peters *, a self-employed mother of five, examined her bank statement and found that instead of being slightly overdraft, a payment of Â£ 774,839.39 from Tax Bins had sent a lot of his account in the dark.
Peters said the experience was “amazing, unbelievable, bizarre” but quickly turned to “a nightmare”.
âIt was like something out of a Hollywood movie, and after I got over the shock, I just assumed someone would realize he made a huge mistake and get the money back quickly. But no one did, and the money stayed in my account, âshe said.
Fast forward 15 months and Peters reached out to the Guardian to ask what she should do as she wanted to return the money.
There was a problem. She had spent almost Â£ 20,000 of it and couldn’t afford to pay it back immediately. The money had arrived in the midst of the pandemic, just as her training job had nearly dried up, forcing her, she said, to dip into her newly inflated bank balance.
“I assumed the HMRC staff would notice their mistake when I paid my taxes in November 2020, but nothing happened,” said Peters, from his modest home on the south coast. âI even tried to call HMRC, but it was impossible to reach anyone at the time. I would wait 30 minutes on the phone, then I would have to give up because my kid would need to be fed, or something.
âOn other calls, I was cut off before I could talk to someone. I transferred Â£ 100,000 to my savings account, but it earned almost no interest. I was never rich and I don’t own a car or even a dog. My income had been decimated and all the time I was eating very slowly in the money. But because I couldn’t pay back the full amount, I was stuck in a catch-22 position. I had a lot of money that I knew I couldn’t spend, but couldn’t do anything in case HMRC wanted to get it all back in one go.
She said the few people she had spoken to about her situation had very mixed reactions. Some told him to do nothing and wait and see what would happen. Others advised him to invest the money in stocks or even property, in the hope that a demand for reimbursement would never come. At one point, she even considered putting some of it in a cryptocurrency in a desperate attempt to recoup the money she had spent and allow her to repay the sum in full.
After the Guardian contacted HMRC, it investigated and discovered that a member of its staff had made the mistake in trying to pay Peters a rebate of Â£ 23.39 on customs duties on packages.
The money was not intended for another person or business and may never have been discovered if it had not come forward. A personal tax expert told The Guardian they had never encountered such a case in their 30-year relationship with HMRC.
Peters biggest fear was being aggressively pursued by HMRC. Section 24A of the Theft Act 1968 makes it an offense to knowingly retain unwarranted credit – where the recipient dishonestly failed to “take steps reasonable in the circumstances to secure cancellation of the credit”.
A spokesperson for HMRC told Peters that the organization “sincerely wanted to support her” in her case.
âWe are sorry for the inconvenience caused to the person. We are working to recover the payment that has been made. For the amount the person has spent, we will work with them to come to a payment agreement that takes into account their financial situation, âhe said.
HMRC said a debt management advisor would now contact her, establish exactly how much she can afford to repay each month and agree to the terms. She offered to pay off the balance over five years.
Peters is not the first person to fall victim to an unexpected transfer. In 2019, the Guardian presented the case of Cambridge reader Peter Teich, who lost his inheritance of Â£ 193,000 after giving his lawyer the correct account number, but the wrong sort code.
The bank, Barclays, told him the recipient refused to allow the return of the money, forcing Teich to mount a costly legal battle to recover the money. After the story appeared, the man who received it, Tim Gray, returned the money, saying he tried to return it at the time.
* Not his real name