Overpaid Tax Credits

• Do you have to Repay?
• What should you do?
• Hardship
• Paying Back an Overpayment
• Help and Advice

This webpage tells you what to do if you agree that you have been overpaid but do not think that you should have to pay it back.

Do you have to Repay?

If the Inland Revenue tells you that you have been paid too much tax credit in the previous year, or that you are being paid too much during the current year, they will usually ask you to pay this back.
But you may not have to pay it back if:

• it was caused by their mistake and you had no reason to think that your award was wrong, or
• paying back the money would cause you hardship.

What should you do?

Stage 1

If you think the overpayment was due to their mistake use the Tax Credits Overpayment Form - TC846 , and write to them and explain:

• why you think it was the Inland Revenue's fault you were paid too much, and
• why it was reasonable for you to think that your award was correct.

If you repeatedly told the Tax Credit office about a change of circumstances and they failed to act on it, you can argue that they confirmed you were entitled to the money by continuing to pay it.

Stage 2

If you are not happy with the reply from Stage 1 then send in a complaint to the Complaints Manager at the Tax Credits office using the Complaints Form (COM1) 286.73 KB

Stage 3

If you are not happy with the reply from Stage 2 then send in a request to review your complaint to the Director of Tax Credits using the Review Form (DIRECTOR1) 286.88 KB

Stage 4

If you are not happy with the reply from Stage 3 then make a further complaint to the Adjudicator’s Office using the Adjudicator Complaint Form (ADJ1) 286.8 KB

Stage 5

If you are not happy with the reply from Stage 4 then consider making a further complaint, via an MP, to the Parliamentary Ombudsman.

Hardship

If you agree that you have been overpaid and paying the money back would cause you hardship, write to the Tax Credits office. Give them details of your current outgoings especially any debts you have, for example, mortgage repayments or rent, and ask them not to recover all or part of the overpayment. Send them a copy of this list to show all your outgoings.

Paying Back an Overpayment

If you do have to repay an overpayment you can either ask to repay in instalments or, if your current award has been reduced to repay an 'in year' overpayment, you can ask the Inland Revenue to top up your current award with 'additional payments'. This will increase your money in the short term, but the Inland Revenue will expect you to repay any additional payments in the following year.

The rules about tax credits are very complicated and the Inland Revenue make a lot of mistakes. If you get a letter telling you that you have been overpaid and you are not happy with this then get advice.

Help and Advice

Useful phone numbers: Tax Credit Helpline 0845 300 3900 Tax Enquiry Line 0845 302 1478

If you live in Tameside contact the Welfare Rights Service: