You might be overpaid tax credits if: there’s a change in your circumstances - even if you report the change on time you or HM Revenue and Customs ( HMRC ) make a mistake you do not renew your tax credits on time HMRC will write to tell you what you owe and how to repay the money. Call HMRC if you: think they made a mistake want to know how they calculated your overpayment If you still get tax credits or are now getting Universal Credit, the money you owe will usually be taken from your future payments. If you no longer get tax credits and have not made a claim for Universal Credit, you’ll have to pay HMRC directly. The money may be recovered from you in another way if you do not repay HMRC in time .

How to repay your tax credits

HM Revenue and Customs ( HMRC ) will send you a letter called a ‘notice to pay’ to tell you what you owe and how to repay. How you repay depends on if you: still get tax credits have moved to Universal Credit do not get tax credits or Universal Credit If you still get tax credits HMRC will automatically reduce your future tax credit payments until you’ve paid back the money you owe. The amount they’ll reduce your tax credit payments by usually depends on how much you currently get and your household income. Household income Reduction £20,000 or less and you get maximum tax credits 10% £20,000 or less and you get less than the maximum tax credits 25% More than £20,000 50% If you only get the family element of Child Tax Credit, your payments will be reduced by 100% whatever your income is. If you’ve moved to Universal Credit Your future payments will be reduced until you’ve paid back the money you owe. Find out more about what happens if you’ve moved to Universal Credit . If you do not get tax credits or Universal Credit HMRC will send you a ‘notice to pay’ which you should pay within 30 days. It’s your responsibility to make sure payments reach HMRC on time. Check your bank’s transaction limits and processing times. If you do not pay in time, the money you owe will be recovered from you in another way. There are several ways to repay. Make payments by phone You can call the automated phone line to make a payment. You can make a full or part payment. If you make a part payment, you can call back another time to pay more. To make a payment, call 0345 302 1429 and press option 2, then option 1. When you call, you’ll need to give: your 16-digit payment reference number (it’s made up of numbers and letters and you’ll find it on your notice to pay letter) how much you want to pay your bank card details Direct Debit You can call the helpline to set up a Direct Debit. You’ll need your 16-digit payment reference number. You’ll find this on your notice to pay letter. It’s made up of numbers and letters. It takes up to 5 working days to set up. Payments appear on your statements as ‘HMRC NDDS’. Online and telephone banking (Faster Payments) Pay to HMRC ’s account and use your 16-digit payment reference number as the payment reference. You’ll find this on your notice to pay letter. It’s made up of numbers and letters. Sort code - 08 32 10 Account number - 12001039 Account name - HMRC Cumbernauld Payments made by Faster Payments will usually reach HMRC on the same or next day, including weekends and bank holidays. If you’re paying from an overseas account, you can pay HMRC in sterling or another currency. Account number ( IBAN ) - GB62BARC20114770297690 Bank identifier code ( BIC ) - BARCGB22 Account name - HMRC Cumbernauld HMRC ’s bank address is: Barclays Bank PLC 1 Churchill Place London United Kingdom E14 5HP At your bank or building society Pay at your branch by cash or cheque. Make your cheque payable to ‘HM Revenue and Customs only’. Write your 16-digit payment reference number on the back of the cheque. You’ll find this on your notice to pay letter. It’s made up of numbers and letters. If you do not give the correct payment reference number, your payment may be delayed. HMRC will accept your payment on the date you make it and not the date it reaches HMRC ’s account. By cheque through the post You can send a cheque by post to HM Revenue and Customs ( HMRC ). Allow 3 working days for your payment to reach HMRC . HMRC Direct BX5 5BD You do not need to include a street name, city name or PO box with this address. Make your cheque payable to ‘HM Revenue and Customs only’. Write your 16-digit payment reference number on the back of the cheque. You’ll find this on your notice to pay letter. It’s made up of numbers and letters. If you do not give the correct payment reference number or fill in your cheque properly, your payment may be delayed. Do not fold your cheque. Include a note with: your name, address and phone number your 16-digit payment reference number how much you’re paying the period you’re paying for You can ask for a receipt if you want one. Get help and support Call the helpline if you: think HMRC made a mistake already have a repayment plan but you get another letter - you can adjust your existing plan or set up a new one

If you cannot afford your repayments

You can ask to repay what you owe over a longer period of time if you’re having financial difficulty. This will mean you pay less each week or month. You may be asked about: any savings and income you have - including benefits and pensions your living expenses - including rent, mortgage or childcare payments and household costs any other repayments you have to make - including loans, credit cards and utility bill repayments How you ask for your repayments to be reconsidered depends on whether you still get tax credits, Universal Credit or neither. If you still get tax credits If HMRC has reduced your tax credits to pay back an overpayment, you can ask them to reconsider: by using their online service - you’ll need to sign in or create sign in details by phone If HMRC give you more time to pay back what you owe, this will mean they take less money from your tax credits each week or month. You will usually receive a decision within 14 working days. If you are still having financial difficulty at the end of the financial year (5 April), you will need to ask HMRC to reconsider your payments again. If you have moved to Universal Credit Contact the Department for Work and Pensions ( DWP ) Debt Management centre if you cannot afford your repayments. DWP Debt Management contact centre Telephone: 0800 916 0647 Textphone: 0800 916 0651 NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 916 0647 Video relay service for British Sign Language (BSL) users - check you can use the service Calling from abroad: +44 (0)161 904 1233 Monday to Friday, 8am to 7.30pm Find out about call charges If you do not get tax credits or Universal Credit Call the tax credits payments helpline to ask HMRC to reconsider. If you’ve received a ‘TC1131’ letter, this means your debt has passed to DWP . Call the DWP Debt Management contact centre to discuss your options. Call Department for Communities (DfC) Debt Management if you’re in Northern Ireland.

If you get Universal Credit

After you start getting Universal Credit you’ll get a letter from HM Revenue and Customs ( HMRC ) telling you how much you owe. The letter is called a ‘TC1131 (UC)’. The letter may come a few months after you’ve moved to Universal Credit. There are different reasons why you might be overpaid tax credits . You can call HMRC if you want to know how they calculated your overpayment. If you are already paying a ‘notice to pay’ , keep making payments until you get the letter. After you get the letter, the Department for Work and Pensions ( DWP ) will reduce your Universal Credit payments until you pay back the money you owe. You do not have to do anything to set this up. There’s a different process if you’re in Northern Ireland . You will repay the Department for Communities (DfC). If you are repaying tax credits overpayments from different years, you may get more than one letter - you must repay each of these debts. If you have questions about your Universal Credit payments Contact DWP Debt Management if you want to check: how much Universal Credit you will get when your repayments will end DWP Debt Management contact centre Telephone: 0800 916 0647 Textphone: 0800 916 0651 NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 916 0647 Video relay service for British Sign Language (BSL) users - check you can use the service Calling from abroad: +44 (0)161 904 1233 Monday to Friday, 8am to 7.30pm Find out about call charges If you cannot afford your repayments Check what to do if you cannot afford your repayments . If you have an existing payment plan If you have a repayment plan for your tax credits debt (also known as a ‘Time to Pay’ arrangement), it will end after you get the letter from HMRC . This applies whether the plan is with HMRC or an independent debt collector. You must cancel any standing orders you’ve set up to repay the debt. HMRC will cancel any Direct Debits. If you claimed tax credits as a couple The debt will be split in half between you. Each of you will receive a letter with details of your half of the debt. You must each pay your half. Contact HMRC if you: think your share is wrong have separated from your partner - this may change the amount you have to repay If you do not get Universal Credit any more If you get the letter from HMRC after you’ve stopped receiving Universal Credit, you’ll be contacted by DWP Debt Management and told to use their repayment service . You can pay back the overpayment in full or set up regular monthly payments. There’s a different process if you’re in Northern Ireland . You must repay the Department for Communities (DfC).

Tax credits overpayments

Overview

You might be overpaid tax credits if:

there’s a change in your circumstances - even if you report the change on time
you or HM Revenue and Customs (HMRC) make a mistake
you do not renew your tax credits on time

HMRC will write to tell you what you owe and how to repay the money. Call HMRC if you:

think they made a mistake
want to know how they calculated your overpayment

If you still get tax credits or are now getting Universal Credit, the money you owe will usually be taken from your future payments.

If you no longer get tax credits and have not made a claim for Universal Credit, you’ll have to pay HMRC directly. The money may be recovered from you in another way if you do not repay HMRC in time.

View a printable version of the whole guide

Tax credits overpayments

Overview

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Tax credits overpayments

Overview

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