How overpayments of tax credits can happen

The Tax Credit Office works out how much to pay you from what you tell them about your income and family circumstances. Sometimes they can pay you too much money - an overpayment. This can happen for a variety of reasons.

On this page:

Why you may have been overpaid

You could have built up an overpayment if:

  • you didn't tell the Tax Credit Office about a change of circumstance that affects your payments - such as a child going to live with someone else
  • your payments were based on wrong information about your personal situation
  • you didn't renew your tax credits on time
  • the Tax Credit Office made a mistake recording the information you gave them
  • the Tax Credit Office didn't act on information you gave them

If you have been overpaid, this will be shown on your award notice.

Tax credits - rights and responsibilities

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You didn't tell the Tax Credit Office about a change of circumstance

Not telling the Tax Credit Office about a change in circumstances is one of the main reasons why people are overpaid tax credits.

When you tell the Tax Credit Office about a change in circumstances, they have to work your award out again. Your award may be re-worked for:

  • the whole tax year - which runs from 6 April one year to 5 April the next
  • the period from when you made the claim, to the end of the tax year
  • the period from when the change happened up to the end of the year

It's your responsibility to tell the Tax Credit Office about any changes in your circumstances. If you don't, they might not know about it until you're asked to renew your tax credits after the end of the year. At this point the Tax Credit Office checks whether the money you have received matches your income and circumstances. If you have received too much money then this means you have been overpaid.

Find out which changes you need to report and when

You haven't reported a change - what happens to your tax credits

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You gave the Tax Credit Office wrong information

Your tax credits are based on your personal circumstances. These are things like:

  • whether you're single or part of a couple
  • how many children you've got
  • how many hours a week you work
  • whether you have a specific disability and have been getting some disability or sickness benefits

So it's important you give the Tax Credit Office the right details about your circumstances on your claim form.

How to avoid common mistakes on your tax credits claim form

Putting mistakes right once you've sent in your tax credits claim

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You didn't renew your tax credits on time

If you're getting tax credits, the Tax Credit Office will normally send you a renewal pack between April and June each year. You use this to tell them if your circumstances or income have changed. The Tax Credit Office can then work out:

  • whether they paid you the right money in the last tax year
  • what your payments should be for the coming year

The deadline for renewing is shown in your pack - usually 31 July. The sooner you check your details and report any changes, the sooner the Tax Credit Office can make sure you get what you're entitled to. If you don't renew your tax credits:

  • your payments will stop
  • you will have to pay back any money from the last tax year that you weren't entitled to
  • you will have to pay back any money paid to you since the start of the new tax year

Renewing your tax credits claim - the basics

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The Tax Credit Office made a mistake on your award notice

When you claim tax credits for the first time, or tell the Tax Credit Office about a change, they will send you an award notice. It is their responsibility to put the right information on your award notice based on information you give them.

It is important that you check your award notice carefully when you get one - use the checklist that comes with it. If there's a mistake it may mean you:

  • are not getting all the money you are entitled to
  • could be building up an overpayment

You must tell the Tax Credit Office within one month if something is wrong, missing or incomplete. They will put it right and send you a new award notice. In this case, you may not have to pay back all of your overpayment.

If there's anything on your award notice that you don't understand, or you're not sure if there's a mistake, call the Tax Credit Helpline.

Contact details for the Tax Credit Helpline

Find out how to check your tax credits award notice

The Tax Credit Office didn't act on information you gave them

When you contact the Tax Credit Office to tell them about a change in circumstances, it's their responsibility to:

  • record the information
  • send you an award notice within 30 days

If you don't get an award notice within 30 days, you should tell them immediately. In this case, you may not have to pay back all of your overpayment.

How to dispute an overpayment

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More useful links

How to avoid being paid too much or not enough tax credits

How to pay back overpaid tax credits

Download a leaflet 'What happens if we have paid you too much tax credit?' (PDF 144K)

Leaving tax credits

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