If HMRC are taking the money from your tax credits, and you can manage on the reduced amount, you don’t need to do anything. Your tax credits will be reduced from the date written on the overpayment letter. They’ll go back to the full amount once the overpayment has been paid.
Are tax credit overpayments statute barred?
The dispute process is not governed by statute. Under statute, HMRC may recover all overpayments howsoever caused. If HMRC agree that all or part of the overpayment will not be recovered, its important to be clear whether they have written-off that overpayment amount permanently or whether they have simply remitted it.
What to do if you are overpaid on tax credits?
You might be overpaid tax credits if: The Tax Credit Office will write to tell you what you owe and how to repay the money. If you think they made a mistake, call the helpline. If you still get tax credits or are now getting Universal Credit, the money you owe will usually be taken from your future payments.
Can a tax credit overpayment be recovered from Universal Credit?
Tax credit overpayments can also be recovered from payments of Universal Credit and DWP have a power more widely to recover tax credit debts by any of the methods it uses to collect its own debt. You can find out more about the move of tax credit debt to Universal Credit in our Universal Credit section.
How does HMRC deal with tax credit overpayments?
Section 29 Tax Credit Act 2002 has always contained a provision allowing HMRC to recover tax credit overpayments by adjusting the person’s tax code. The legislation states that in this respect tax credit overpayments are to be treated the same as underpayments of tax.
How does the Tax Credit Office tell you what you owe?
The Tax Credit Office will write to tell you what you owe and how to repay. How you repay depends on whether you still get tax credits, Universal Credit or neither.
