In this section:

  • Tax credit repayments

How to make tax credit repayments

This guide gives you the payment options for repaying tax credit overpayments to HM Revenue & Customs (HMRC). It also tells you when you might 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 his guide to make a payment.

On this page:

When you need to pay tax credit repayments

HMRC will send you a Notice to Pay (which will include a payslip) telling you how much you must repay. If you cannot repay the full amount within 30 days, please call the Payment Helpline on Tel 0345 302 1429 to talk through your options.

HMRC may be able to:

  • spread the repayment over a longer period
  • put back the date they start to collect the money you owe them

You must contact them as soon as possible to arrange this. HMRC will need to ask for information about your financial circumstances before they can make a decision.

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Use the right reference number

When you make your payment to HMRC it is important that you use the right reference. This makes sure your payment reaches your account and that you won't get reminders after you've paid.

You can find your reference number on the payslip that's attached to the Notice to Pay that HMRC sends you. The reference number is 16 characters, the first eight characters are your National Insurance number, for example QQ123456311204NC.

Make sure you enter your reference number with no spaces between the characters or it could lead to delays in updating your account.

Check your tax credit reference using HMRC's reference checker

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Direct Debit - how to set up

HMRC recommends that you pay by Direct Debit because:

  • it's safe and secure
  • it puts you in control, making it less likely you'll miss a payment deadline
  • Direct Debit provides certainty about when your payment will reach HMRC
  • HMRC checks your payment reference to make sure it's correct so payment reaches your account without any delay
  • unlike any other payment method you are protected by the Direct Debit Guarantee
  • it avoids the need to write cheques - and saves postage if you normally pay by post

Find out about the Direct Debit Guarantee (PDF 21K)

How to set up payments

Setting up a Direct Debit over the phone

You can set up a Direct Debit to repay your tax credit overpayment by contacting the HMRC Payment Helpline on Tel 0345 302 1429. Before calling the Payment Helpline please ensure you have the following information to hand:

  • your tax credit reference number from the reference box on the payslip HMRC sent you
  • your bank or building society details - sort code, account number and account name

Setting up a Direct Debit online

If you're registered to use HMRC Online Services - for example for Self Assessment - 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

Setting up payments - how much time to allow

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 bank statement

Your Direct Debit payment will appear on your bank statement with the description 'HMRC NDDS'.

If you are having problems paying

If you are having difficulty making your Direct Debit payments, perhaps because of a change in your circumstances, please call HMRC on Tel 0345 302 1429 to discuss your options.

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Bank details for Faster Payments by online/telephone banking

You can use your bank or building society services to make a Faster Payment using your online/telephone banking.

Setting up and making payments

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 give them:

  • HMRC's bank account details
  • your tax credit reference number

Find out HMRC's bank details

Faster Payments

This is a service that has been introduced by the banking industry for sending online or telephone banking payments on the same or next day, providing the value of the payment does not exceed the value limit set by the sending bank.

More about the Faster Payments Service

Information about Faster Payment limits (Opens new window)

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Paying at a bank by Bank Giro

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.

If paying this way please:

  • take your HMRC payslip to your own bank branch (other banks may refuse to accept it or may charge you for this service)
  • make cheques payable to 'HM Revenue & Customs only' followed by your tax credit reference

You can find your reference in the reference box on the payslip HMRC sent you.

Please allow at least three bank working days for your payment to reach HMRC. 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 so your payment will reach your account on time.

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At the Post Office

You can make a payment at the Post Office by cheque, cash or debit card without charge. This is more efficient and secure than sending a cheque by post.

If paying this way please:

  • take your HMRC payslip with you (or you will be charged for using this service)
  • make cheques payable to 'Post Office Ltd'

Please allow at least three bank working days for your payment to reach HMRC. 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.

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By post

HMRC recommends that you make your payments using one of the methods covered in this guide. If you use the right reference number electronic payments are generally more efficient and secure.

If you do need to pay by post:

  • detach the payslip and send it with your cheque to HMRC's Accounts Office using the pre-addressed envelope sent to you or to the address below
  • do not fold the payslip or cheque and do not fasten them together
  • make your cheque payable to 'HM Revenue & Customs only' followed by your payslip reference, which can be found on the payslip HMRC sent you and is located in the reference box

Please allow at least three working days for your payment to reach HMRC by post. This allows for any delays in the post outside HMRC's control.

If you do not have an HMRC pre-addressed envelope, the address for posting a cheque is:

HM Revenue & Customs
Bradford
BD98 1YY

Postdated cheques

HMRC only accept postdated cheques if you have made an arrangement with the Payment Helpline to spread your payment by sending postdated cheques. Contact the Payment Helpline on Tel 0345 302 1429.

HMRC have automated the way they deal with payments sent by post. So you need to send a covering letter with your postdated cheque. Otherwise HMRC won't know that the cheque is postdated and will present it straight away.

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What to do if you don't have a payslip

If you pay your tax credit overpayment electronically you will not need a payslip.

However, if you are paying by post and you don't have a payslip, send these details with your payment:

  • your name
  • your address
  • your telephone number
  • your tax credit reference number
  • the period of the claim that you are repairing
  • the amount of tax credit you are paying

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Payment receipt requests

If you have made your payment electronically using one of the methods covered in this guide you can confirm from your own bank or building society statement that payment has cleared your account.

If you pay HMRC by post you need to send a separate letter with your payment to ask for a receipt. Please don't write on your HMRC payslip as they are processed automatically.

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More useful links

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

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