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HM Revenue and Customs Brief 40/14 - recovering tax credits overpayments


HM Revenue and Customs -Tax Authorities

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Published 7 November 2014

Purpose of the brief

To provide an update on changes to how HM Revenue and Customs (HMRC) will recover some tax credit overpayments.


Advisers and intermediaries who may deal with tax credit customers.

Action required

For information

The changes

HMRC is changing the way it recovers tax credits overpayments.

Claimants who have been overpaid tax credits may have their tax credits award reduced to repay outstanding debts from previous claims.

Depending on a personís circumstances, outstanding overpayment(s) may be from one or more previous awards.

HMRC will continue this recovery until the overpayment(s) is repaid or the claimant is no longer entitled to tax credits.

HMRC will send a revised award notice to the claimant when it starts to recover overpayment(s). This will tell the claimant how much they owe and how it will affect payments.

HMRC wrote to claimants about these overpayment(s) at the time it identified them. If claimants have an arrangement in place to repay debts they will not be affected by this change.

HMRC will apply a different rate of recovery depending on a householdís circumstances and income. Those on lowest incomes will have their debt repayments spread over a longer timeframe.

The maximum recovery rate is 25% of current payments; however households with a limited income who are receiving a maximum tax credits award may only experience a 10% reduction in payments.

Further information

Claimants suffering severe hardship can contact the Tax Credit Helpline on Telephone: 0345 300 3900 (Textphone: 0345 300 3909) to discuss their individual circumstances and any help that may be available.

For more information read Tax credits overpayments

About the Author

© Crown Copyright 2014.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2014-11-10 09:00:19 in Tax Articles

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