You have a tax credit overpayment

If you have a tax credit overpayment which is causing you difficulty you need to consider which possible solutions may work for you. If these are not successful, you always have a right to ask HMRC to reconsider the position if it is causing you financial hardship by:

• Reducing the rate of recovery, if the overpayment is being recovered from an on-going award
• Giving you a longer time to pay a bill in respect of a tax credit overpayment
• Writing off part or all of your tax credit overpayment
• Suspending recovery of your tax credit overpayment
• Take account of your health, mental health or exceptional circumstances

You can find out more about this in an HMRC leaflet which is designed for advice agencies called ‘Guidance on how HMRC deals with tax credit overpayment’. It can be found here http://www.hmrc.gov.uk/leaflets/how-hmrc-handle-txcr-opay.pdf. This leaflet deals with all aspects of the recovery of tax credit overpayment, so it may enable you to solve your problem. However, to give you some more help, we will now provide a step by step guide to dealing with a tax credit overpayment.

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

Step by step guide to dealing with tax credit overpayments

The first step is check if the overpayment is being recovered by deduction from your on-going award (see section 2), or if you have been sent a bill (see section 3).