Helen Peters, a self-employed mother of a five-year-old, was pushed into a precarious situation in August 2020. One day, she received an unexplained Bacs payment of £774,839.39 from HM Revenue and Customs (HMRC). She never meant to pay that much money—in fact, it was apparent that it was a mistake. Now, it is one of the biggest burdens weighing her down.
Before that surprise windfall, Peters had been slightly overdrawn in her checking account. With the erroneous payment made her financial situation, leaving her account thousands of dollars in the black. That rapid influx of funds brought a host of complications. Peters even tried to contact HMRC to let them know of the error, but could not get in touch with the right channels.
“I assumed that HMRC staff would notice their mistake when I paid my tax in November 2020, but nothing happened,” said Peters. This failure to respond provided her opening to spend nearly £20,000 of the parish’s money unchecked. It was not until two years later that FSIS took action against the improper payment.
In trying to avoid such a trade-off, Peters transferred £100,000 of her budget into the savings account. The sad irony is that this money earned nearly zero interest, making her feel like she was standing still financially. For about six months, she was not joking when she said she considered putting part of her money into cryptocurrency. She thought this would allow her to pay the total balance owed.
The emotional toll of the issue has taken an incredible burden on Peters. Her main concern is being chased hard by HMRC to repay that money. In an effort to settle the issue, she has agreed to repay the amount owed over the span of five years.
In response to Peters’ situation, an HMRC spokesperson stated, “We are sorry for the inconvenience caused to the individual. We are working to recover the payment that was made. For the amount that the individual spent, we will work with them to come to a payment arrangement that takes into account their financial circumstances.”
HMRC may offering Peters all sorts of reassurances, but they do not calm Peters’ fear of future enforcement action for retaining an improper credit. Section 24A of the Theft Act 1968 states that it is an offence to have a wrongful credit retained with knowledge. This law just creates more strain on her already complex financial situation.
Now HMRC has committed to appoint a debt management adviser to negotiate repayment terms with Peters. The adviser will take stock of her financial picture. This evaluation will provide an understanding of what she can reasonably pay back each month, providing Peters and her family hope for a workable solution.
It was like something off a Hollywood disaster movie, and once I had been able to get over the shock I simply expected that some staffer would come to understand that they had made a catastrophic mistake, and that they would quickly retrieve the funds. Peters had to pause to think about the surreal nature of her experience. Everybody was standing around, and the money just accumulated in my account.
Holding down this difficult assignment hasn’t daunted Peters’ energy and enthusiasm. She looks forward to further guidance and support from HMRC as she aims to continue to put this mistake right and maintain her family’s financial security. What happens in her case will help inform how other cases like hers are handled going forward.