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Tax Credits Overpayments - How are tax credit overpayments recovered?

Find out more about Tax Credits Overpayments.

How are tax credit overpayments recovered?

Tax credit overpayments may be recovered:

  • By deduction from your on-going tax credit award
  • Direct recovery from you
  • Court action.

If you are still receiving tax credits, the overpayment will be recovered from your on-going award.

If you are a member of a couple and the overpayment happened before you and your partner made a joint claim, the overpayment made to you cannot be recovered from your new joint claim. Your award may be reduced by 10%, 25%, 50%, or 100% of the amount you would otherwise receive, depending on your circumstances. See HMRC's 'Tax Credits: What happens if I've been paid too much' (link opens in a new window) guidance for further information.

If recovery from your on-going tax credits is not possible, you will be asked to repay the full amount and given contact details to make a different arrangement. If the overpayment was on an award paid on your joint claim as a member of a couple, the overpayment may be recovered from you or your joint claimant.

If you do not repay, you may face court action. This must normally be started within six years of the overpayment decision.

If you are threatened with court action, you should seek advice from a benefits adviser as a matter of urgency

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