This guide explains the available payment options for repaying tax credit overpayments to HM Revenue & Customs (HMRC) and gives a summary of when you need to make repayments.
If you are still receiving tax credits you can pay back what you owe HMRC by receiving reduced payments from them over the next tax period. If you are no longer receiving tax credits, but have outstanding tax credit payments to make to HMRC, you can use one of the methods described in this guide to make a payment.
HMRC recommends that you make your tax credit repayments electronically. HMRC counts all of the payment methods below as electronic apart from payment by post. Paying electronically:
On this page:
With effect from 9 August 2011 you will no longer be able to From 16 December 2011 HMRC will be able to accept payments made using the Faster Payments Service (FPS).
FPS is a service that has been introduced by the banking industry that allows payments by internet or telephone banking to be received on the same or next day, provided the value of the payment does not exceed the limit set by your own bank or building society.
Before making a payment using FPS you should contact your bank or building society to confirm the services available to you, any daily value limits and latest cut off times for making a payment.
More about Faster Payments Service
You must pay back the full amount of the overpayment within 30 days of receiving a Notice to Pay (which will include a payslip) from HMRC.
If you cannot repay within 30 days please call the Payment Helpline on Tel 0845 302 1429 and HMRC can make arrangements for you to pay it back in instalments over 12 months. You must contact them as soon as possible to arrange this.
It may be possible to repay the amount over a longer term if repaying within 12 months would mean that you are unable to meet essential living costs. HMRC will need to ask for information about your financial circumstances before they can make a decision.
You can now repay your tax credit overpayment by Direct Debit. HMRC recommends that you pay by Direct Debit because:
Find out about the Direct Debit Guarantee
You can set up a Direct Debit to repay your tax credit overpayment by contacting the HMRC Payment Helpline on Tel 0845 302 1429. Before calling the Payment Helpline please ensure you have the following information to hand:
If you're registered to use HMRC Online Services - for example for Self Assessment or PAYE for employers - you can set up a Direct Debit online. There is no online service for tax credits, so you can't register just for tax credits.
Find out how to set up a Direct Debit online
When setting up your first Direct Debit payment you need to allow at least five bank working days before the date you wish to make your payment.
Bank working days are Monday to Friday excluding bank holidays. If you haven't allowed enough time then you'll have to pay by another electronic payment method described elsewhere in this guide.
Your Direct Debit payment will appear on your bank statement with the description 'HMRC NDDS'.
If you are having difficulty making your Direct Debit payments, perhaps because of a change in your circumstances, please call HMRC on Tel 0845 302 1429 to discuss your options.
You can use your bank or building society services to pay by:
Internet banking – select ‘HM Revenue & Customs’ from your bank/building society’s beneficiary list (sometimes called a ‘payee list’) or use HMRC’s bank account details to set up a manual instruction. You also need to enter your tax credit reference and the payment amount. When using your bank or building society’s beneficiary list, please ensure you take care in selecting the correct HMRC entry for the payment you want to make.
Telephone banking – phone your bank/building society and give them HMRC’s bank account details, your tax credit reference and the amount to pay.
Faster Payments – this is a service that has been introduced by the banking industry for sending payments initiated by internet or telephone banking on the same or next day, providing the value of the payment does not exceed the value limit set by the sending bank.
Before making a payment you should contact your bank or building society to confirm the services available to you, any daily value limits and the latest cut off times for making a payment.
More about the Faster Payments Service
Information about Faster Payment limits (Opens new window)
To pay your tax credit repayment using any of the above payment methods you'll need to set up the payment details with your bank. You'll need to supply them with:
When making a payment to HMRC please make sure you always use the correct bank account details and reference number. And that your bank has confirmed that your payment has been made successfully.
If you make a mistake with the sort code or account number there may be a delay before your record is credited or your payment may not be received at all. That could mean you are charged a penalty, interest or surcharge for late payment.
When paying by internet or telephone banking or Faster Payments you should only use the bank account details shown below and not the account number shown on the front of your HMRC payslip as this sort code is only for payments made by Bank Giro or at a Post Office.
| Accounts Office | Sort code | Account number | Account name |
|---|---|---|---|
| Cumbernauld | 08 32 10 | 12001039 | HMRC Cumbernauld |
If your bank asks for the address of the bank to which payment is being made please use
Citi
Citigroup Centre
Canada Square
Canary Wharf
London
E14 5LB
When making your payment you will need your reference number which is shown on the payslip HMRC sent you and is located in the reference box. The reference number is made up of 16 characters for example AB123456311204NC (this reference is only an example and should not be used to make a payment) where the first eight characters are your National Insurance number.
It is important that you show the reference with no gaps between the characters otherwise it could lead to delays in updating your account.
Check your Tax Credit reference using HMRC's reference checker
If your bank or building society offers the Bank Giro service you can make a payment at your own bank branch by cheque or cash. HMRC treats any payment made by Bank Giro as electronic, giving you extra time to pay.
If paying this way please:
To allow for possible delays in bank processing (for which HMRC is not responsible) please allow at least three bank working days for your payment to reach them. Bank working days are Monday to Friday excluding bank holidays.
When paying by bank giro please only use an official HMRC payslip. HMRC payslips contain the correct HMRC bank account information and ensures payment reaches your account on time.
You can make a payment at the Post Office by cheque, cash or debit card without charge. HMRC treats any payment made at the Post Office as electronic, giving you extra time to pay.
If paying this way please:
To allow for possible delays in bank processing (for which HMRC is not responsible) please allow at least three bank working days for your payment to reach them. Bank working days are Monday to Friday excluding bank holidays.
HMRC highly recommends that you make your payments electronically using one of the methods described elsewhere in this guide. Electronic payments are generally more efficient and secure, provided you use an accurate reference number.
However if paying by post please:
To allow for possible postal delays (for which HMRC is not responsible) please allow at least three working days for your payment to reach them.
If you do not have a pre-addressed envelope, the address for posting a cheque is:
HM Revenue & Customs
Bradford
BD98 1YY
HMRC will only accept a postdated cheque if you have made a prior arrangement with the Payment Helpline to spread your payment by sending postdated cheques. To arrange to spread your payment please telephone the Payment Helpline on Tel 0845 302 1429.
Because of the highly automated operations used for processing postal payments HMRC can only identify a postdated cheque if there is a letter with it.
If you don't send a covering letter HMRC won't recognise that the cheque is postdated and will present it straight away.
You can pay your tax credit repayment electronically from a bank account outside the UK. You should check with the bank how long they take to make a payment.
You'll need to give your bank or building society HMRC's bank account details. You should check with your bank or building society to see how long it takes to transfer a payment.
Please take care if you need to enter our bank account details. If you make a mistake with the sort code or account number there may be a delay before your record is credited or your payment may not be received at all.
When making a payment from abroad you should not use the account number shown on the front of your HMRC payslip as this sort code is only used for payments made by bank giro or at a Post Office. You should provide your bank with HMRC’s international bank account details as shown below.
The account name you should use is 'HMRC Cumbernauld'.
| Currency | International Bank Account Number (IBAN) | SWIFT Bank Identifier Code (BIC) |
|---|---|---|
| Sterling and foreign currencies (including euro) | GB74CITI08321012001039 | CITIGB2L |
Note: Where and IBAN is shown you must give this number as well as the SWIFT BIC.
If your bank asks for the address of the bank to which payment is being made please use
Citi
Citigroup Centre
Canada Square
Canary Wharf
London
E14 5LB
When making your payment you will need your reference number, which is shown on the payslip HMRC sent you and is located in the reference box. This is made up of 16 characters, for example AB123456311204NC (this reference is only an example and should not be used to make a payment) where the first eight characters are your National Insurance number. It is important that you show the reference with no gaps between the characters, otherwise it could lead to delays in updating your account.
Check your Tax Credit reference using HMRC's reference checker
In order to minimise costs to all taxpayers HMRC does not automatically issue receipts for payments.
If you have made your payment electronically using one of the methods described elsewhere in this guide you can confirm from your own bank or building society statement that payment has cleared your account.
However, if you are paying HMRC by post and you need to ask for a receipt include a separate letter with your payment. HMRC cannot identify any instructions written on payslips as they are processed automatically.
If you pay your tax credit overpayment electronically you will not need a payslip. HMRC recommends that you make your tax credit overpayment payments electronically using one of the methods described elsewhere in this guide. Electronic payments are generally more efficient and secure, provided you give HMRC an accurate reference number.
However, if you are paying by post and you don't have a payslip, these details should accompany your payment:
You should then send your payment to the contact details described in the Paying by post section of this guide.
Find out more about tax credit overpayments
Get information on what to do if you have problems with your tax credit
Find out what you can do if you have a problem making a payment
