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Tax Credits Overpayments - Are all overpayments of tax credits recoverable?

A tax credit overpayment can happen if: - you give incorrect or incomplete information when making or renewing a claim - you fail to notify a change of circumstance - you don’t report significant increases in income - you don’t renew your tax credits on time - HM Revenue and Customs (HMRC) make an error. This guide explain more about them and what to do if you think you have been overpaid.

Are all overpayments of tax credits recoverable?

Tax credits are assessed on an annual basis and your total entitlement for a year is not finalised until the end of that tax year. This means that an element of under- and over- payment is built into the system. It is expected that all overpayments will be carried over and recovered during the next tax year.

This means that all tax credits overpayments are legally recoverable. However, HMRC's 'Tax Credits: What happens if I've been paid too much' guidance (link opens in a new window) states that an overpayment will not be recovered if it was due to a mistake at the tax credit office and you met all of your responsibilities by reporting changes in circumstances promptly, by checking all award notices and notifying HMRC within one month of any mistakes or errors.

If both you and the Tax Credit Office made a mistake, they will decide whether to recover some or all of the overpayment.


Reviewed: August 2017

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