Tax Credits Overpayments - What if I can’t afford to repay?

For some people, having to pay back an overpayment of tax credit may cause financial problems.

If you have had your tax credit payments reduced to pay back an overpayment, and it is causing you hardship, you can ask HM Revenue and Customs (HMRC) to consider reducing the amount they collect from you.  This will mean it takes longer to pay back the overpayment. If you are paying back the overpayment directly, you can ask HMRC not to recover some or all of the overpayment if recovery would cause you hardship or you have other special difficulties, such as mental illness, illness or disability.

You may be able to negotiate a suspension of recovery, reduction of the amount to be recovered or for the overpayment to be written off.

See HMRC's 'Tax Credits: What happens if I've been paid too much' guidance and GOV.UK's Tax Credit Overpayments information.

If you have been overpaid, you can make a complaint if you are unable to reach an agreement on recovery. See GOV.UK's Tax Credit complaints information.

If your overpayment is being recovered through deductions from your Universal Credit, you can contact debt management at the DWP to ask them to reduce the amount of deductions. 

If you can't afford to repay an overpayment, we recommend that you get advice from a benefits adviser.

Overpayments of tax credits count as a debt. If you are struggling with debt, get free, confidential, responsible debt advice.

Reviewed: August 2022