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If you’re still getting tax credits

If you're still getting tax credits, the Tax Credit Office will reduce your ongoing payments to get back the overpaid amount. However if you’re no longer entitled to tax credits, or you’ve made a new claim after splitting up with your partner, the Tax Credit Office will ask you to make a direct payment - a one off payment for the full amount.

Reducing your payments

If the Tax Credit Office has paid you too much in this tax year - or a previous one - they will automatically reduce your ongoing payments until you pay back the overpaid money.

The amount the Tax Credit Office reduce your payments by depends on whether you get tax credits in full, or at a reduced rate. They make their decision based on the information you gave them about your income. The higher your income, the more your tax credit payments are reduced.

Check your award notice to find out if you get tax credits at a reduced rate. If you do, it’s shown as ‘reduction due to your income’ in part 2 'How we work out your tax credits'.

If there’s no reduction shown, because of your low income, the most the Tax Credit Office will take back from your ongoing payments is 10 per cent.

If you do get a reduction because you have quite a high income and only get the family element of Child Tax Credit, the Tax Credit Office will take back up to 100 per cent from your ongoing payments.

For everyone else they will take back up to 25 per cent from your ongoing payments.

Example 1

You are currently getting the maximum amount of tax credits with no reduction due to income. Your tax credit payments were £2,613 a year, or £50 a week. The Tax Credit Office will reduce your payments by 10 per cent - so you’ll still get 90 per cent of your money. Your new payments will be £2,352 a year, or £45 a week.

Example 2

You are currently getting the family element of Child Tax Credit only with a reduction due to your income. Your tax credit payments were £545 a year, or £10.50 a week. The Tax Credit Office will reduce your payments by 100 per cent, so you’ll get no more money until the overpayment has been paid back.

Example 3

You are currently getting Child Tax Credit and Working Tax Credit with a reduction due to your income. Your tax credit payments were £1,046 a year, or £20 a week. The Tax Credit Office will reduce your payments by 25 per cent - so you’ll still get 75 per cent of your money. Your new payments will be £784.50 a year, or £15 a week.

If you need help to understand how your payments will be reduced, call the Tax Credit Helpline on 0845 300 3900 or textphone 0845 300 3909.

You can make extra payments if you want to clear your overpayment more quickly. To do this call the Tax Credit Payment Helpline on 0845 302 1429.

If your reduced payments are causing you financial difficulties

If you can’t meet your essential living expenses such as rent, gas or electricity bills, the Tax Credit Office may offer you a longer period in which to pay by changing the rate at which you pay it back. If they do this, it'll take you longer to pay back the overpayment.

Call the Tax Credit Helpline on 0845 300 3900 or textphone 0845 300 3909 to find out what your options are.

• Difficulty repaying overpaid tax credits?

If you’re no longer getting tax credits

You may not be able to claim tax credits for this tax year. This may be because:

• your circumstances have changed
• you haven’t renewed your tax credits
• your tax credit award has ended - if, for example, you have split up from your partner

If you’ve been overpaid and are no longer getting tax credits, the Tax Credit Office will ask you for a direct payment - a one off payment for the full amount.

They will ask you to do this even if you are receiving another award of tax credits for a new household.

Making a direct payment

The Tax Credit Office will send you a Statement of Account that gives details of the overpayment. You’ll also get a Notice to Pay which includes a payment slip for you to make your repayment. You’ll need to pay within 30 days.

• How to make tax credit repayments Opens new window

What if you can’t pay within 30 days?

If you can’t pay within 30 days, you can arrange to pay back the money over 12 months.

If you still need more time to pay, get in touch with the Tax Credit Office so they can talk through your options. They may be able to:

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

For more information call the Tax Credit Payments Helpline on 0845 302 1429 as soon as possible. They will make a decision based on your circumstances.

If you're paying back more than one overpayment at the same time

Some of your repayments can be stopped temporarily, as long as both of the following apply:

• you're currently paying back one overpayment by direct payment
• you're also paying back another overpayment from your ongoing tax credits payments - but only if your payments have been reduced by 10 per cent or 25 per cent

If this applies to you, you can ask for the direct payment to be put on hold until you've paid back the overpayment from your ongoing tax credits payments. Get in touch with the Tax Credit Office.

If this doesn't apply to you and you can't meet your essential living expenses such as rent, gas or electricity bills, contact the Tax Credit Office to find out what your options are.

• Difficulty repaying overpaid tax credits?

Repaying an overpayment if you’ve split up from your partner

If you live with a partner, you must make a joint tax credits claim, which means you are both responsible for paying back any overpayment. The Tax Credit Office will write to you both telling you about the overpayment.

If you've split up from your partner you must tell the Tax Credit Office as soon as possible as any joint tax credits claim will end. An overpayment can’t be collected from any new tax credits claim, so a direct payment - a one off payment for the full amount - will have to be made. If the Tax Credit Office do not have an address for one of you, they'll make every effort to find one.

You and your ex-partner can agree between you to pay different amounts. For example:

• each of you to pay half
• each of you to pay different amounts
• one of you to pay the full amount

If this agreement doesn’t work, the Tax Credit Office will ask each of you to pay half the amount.

• You have separated and have a joint tax credits overpayment

You can make a new claim as a single person or with a new partner but you must contact the Tax Credit Office to do so. They can’t reduce your new claim payments to collect back an overpayment from an earlier award. You will have to make a direct payment - a one off payment for the full amount.

• Tax credits when your partner leaves or a new partner moves in

Contact the Tax Credit Office

If you need more help you can call the Tax Credit Helpline on 0845 300 3900, or textphone 0845 300 3909 if you are deaf or have a hearing or speech impairment (open from 8.00 am to 8.00 pm every day except Christmas Day, Boxing Day and New Year's Day).

If you’re calling from overseas you can also contact the Tax Credit Office on +44 289 053 8192.

More useful links

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

• How to dispute a tax credits overpayment

• Download the HMRC leaflet 'What happens if we have paid you too much tax credit?' (PDF, 113K) Opens new window

• Help with PDF files