If you think the overpayment is incorrect, or that HMRC has made a mistake

The main options you have are:

1)      If you think the amount of your tax credit award was wrong and this has resulted in a tax credit overpayment – for example, you were given tax credits for the wrong number of children, or a disability element you were due was not paid, or the income figure is wrong (for example the first £100 per week of Statutory Maternity / Paternity / Adoption pay should be ignored), then you have a right of appeal. Appeals must be made in writing and there is a deadline. They should be made within 30 days of the award notice about which you are making the appeal, but in practice you are allowed up to 13 months (but no longer!)

The official appeal form can be found here http://www.hmrc.gov.uk/leaflets/wtc_ap.pdf.

There is guidance on appeals on the HMRC website at http://www.hmrc.gov.uk/taxcredits/things-go-wrong/complaints-appeals/appealing.htm  

2)      If you think HMRC has made a mistake in administration or advice then you may be able dispute the recovery of the overpayment. By doing this you are agreeing that the overpayment is correctly calculated, but you feel that HMRC is at least partly responsible for the overpayment and that, as a result, all or part of the overpayment should be written off.

An example of this is that you advised the Tax Credits Office of a substantial change in your income on many occasions and they failed to change your award.

3)      You should dispute recovery of an overpayment using form TC846 (http://www.hmrc.gov.uk/forms/tc846.pdf). You will need to show that you have complied with all your responsibilities.

There is guidance on disputing an overpayment on the HMRC website at http://www.hmrc.gov.uk/taxcredits/things-go-wrong/overpayments/dispute.htm

In general, recovery of tax credit overpayment is governed by HMRC code of practice (COP)26. You can download a copy of this code of practice from the tax credit leaflets section of the HMRC website or by following this link http://www.hmrc.gov.uk/taxcredits/things-go-wrong/overpayments/dispute.htm.