A MOTHER-of-two intends to seek legal advice after being told she owes thousands of pounds in overpaid tax credits.

The news comes in the wake of a catalogue of blunders by HM Revenue And Customs (HMRC) which have plagued Julie Acaster since 2003.

The First York bus driver has vowed to seek legal advice in a desperate bid to end the long-running fiasco.

The 29-year-old of Shipton-by-Beningbrough, near York, said the latest alleged overpayment amounted to about £3,500.

It came to light after she queried claims that she had been overpaid by a smaller sum of £516.

Her complaint was investigated and a fresh letter sent, amending the figure HMRC claimed was recoverable to £240.

She said: "Five hours later, when I rang up, the figure had shot up to £3,500.

"Someone has looked into my complaint and found all these other overpayments'. I am distraught, heartbroken. I have been in floods of tears."

The total relates to four sums which the department claims she has been overpaid in tax credits since 2003.

"It is scary. It could just keep going up," said Julie, mother to Aaron, eight, and Kian, three.

"I am going to a solicitor and I am going to take them to court because I can't keep going through this. It will never stop.

"If our circumstances change, we have to tell them immediately. It should work both ways. If I owe money from 2003, why haven't they been in touch before now?"

The Press first highlighted Julie's difficulties in April, 2004.

She claimed HMRC had deleted Aaron from its computer system twice, and stopped her credits while she was pregnant because it claimed it had overpaid her by £2,499.

It later gave her £1,000 back - then stopped her credits again, claiming it had overpaid her by £270.

She then received more than 40 different notices in 15 months, telling her she was entitled to different amounts in tax credits.

After struggling to repay £2,000 in alleged overpayments over 18 months, it then emerged she had repaid £1,000 too much.

Michael Becket, of York Citizens Advice Bureau, said many clients suffered tax credit problems.

"There's a procedure where you can ask the tax man not to recover an overpayment if you have grounds because of an official error'," he said. "But it is a minefield. If in doubt, get advice from the CAB."

He said people could also ask for payments to be reduced and spread over a longer period.

HMRC refuses to discuss individual cases, but a spokesman said there was an individual right of appeal.