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Tax credit overpayments

Tax credit overpayments

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Have you been overpaid tax credits?

There are several circumstances which can result in you receiving tax credit overpayments. Although you may initially be delighted to be receiving more than you are entitled to, not informing the tax office can land you in hot water, and you may eventually have to pay back any overpayments made to you.

How do overpayments occur?

1. You failed to let the tax office know of changes in circumstances

There are certain changes that you need to let the tax office know about. This includes changes in paid childcare, working hours, living arrangements such as living alone or with a partner, and the number of children in your household. Any changes should be reported within a month of them happening. If you report changes later than this, you could be asked to repay any overpayments.

2. The tax office makes a mistake

The system isn’t flawless and sometimes the tax office may make mistakes that lead to overpayments. It may take longer for any changes you have told them about to be updated or they may have made an overpayment due to an administrative error. If you think you have been overpaid due to a mistake made by the tax office, state this in a letter and call to make them aware.

Will I have to pay back the money?

If the error is on their part, then you will not have to repay any overpayments. Maintain as much evidence as possible that you informed the tax office of any changes at the appropriate time and keep copies of all correspondence regarding any overpayments. You may have to repay overpayments if the mistake was yours or you failed to inform the tax office in time of any changes in your circumstances.

I think I have been overpaid, what now?

Contact the tax office as soon as possible by calling 0345 300 3900 and ask them if your payment is correct.

I received an overpayment letter but don’t know why

Tax credit overpaymentsCall the tax office and as for an explanation. If you are not satisfied with the response, send them a letter requesting a definitive answer. In this letter, also draw attention to the fact that your circumstances have not changed and that there is no reason on your part for an overpayment to have occurred.

Disputing a repayment

You can raise a dispute if you provided all relevant information but the tax office failed to act upon it.


If you disagree with the amount of tax credits you are receiving or with a repayment demand, visit the HMRC tax credits website and complete the relevant form within a month of being informed of an overpayment. For further help, call the tax office directly.


It is usual for overpayments to be taken from future tax credit payments and you may see a reduction in your weekly payments

When your payments stop

If you do not renew your tax credits before the deadline, your payments will stop. They will also stop if you no longer qualify for tax credits. If you do still qualify, call the tax office to get them reinstated. When you no longer qualify, you may have to make repayments. If you cannot afford to make the repayments, speak to the tax office and they may be able to organise a repayment plan. In rare cases, if it is believed that you will never be able to repay the entire amount, your debt could be completely wiped out.

Getting help

For those concerned about tax credit repayments, there is help out there. Contact The Citizens Advice Bureau, Tax Credit Casualties or the Low Income Tax Reform Group for advice.









About Denise Morgan

About Denise Morgan

Denise has five years' experience writing for various web-based companies. During this time she has also contributed to magazine articles and brochures. In addition to writing, Denise is a gigging singer/songwriter and is proud to have featured on the first series of BBC One's The Voice UK, having been selected by the great Sir Tom Jones. Denise is mother to the most talented and ridiculously intelligent two year old that has ever been and ever will be (until she creates another one that is). This kind of hyperbole is restricted only to her progeny and is not a reflection of her usual writing styles... Denise and her son live in Manchester along with their five cats - yes that's right, five.

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