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If you’re still getting tax credits

If you're still getting tax credits, HMRC 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, they will ask you to make a direct payment - a one off payment for the full amount.

Reducing your payments

If HMRC have 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 they reduce your payments by depends on whether you get tax credits in full, or at a reduced rate. HMRC make this 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 HMRC 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, HMRC will take back up to 100 per cent from your ongoing payments.

For everyone else HMRC 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. HMRC 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 £10.43 a week. HMRC 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. HMRC 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 HMRC may offer you a longer period in which to pay by changing the rate at which you pay it back. If HMRC 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? Opens new window

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, HMRC will ask you for a direct payment - a one off payment for the full amount.

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

Making a direct payment

HMRC 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 HMRC within 30 days.

What if I can’t pay within 30 days?

If you can’t pay HMRC 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 HMRC so they can talk through your options. HMRC may be able to:

• spread the repayment over a longer period
• put back the date HMRC 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. HMRC will make a decision based on your circumstances.

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. HMRC will write to you both telling you about the overpayment.

If you've split up from your partner you must tell HMRC 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 HMRC do not have an address for one of you, we’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, HMRC will ask each of you to pay half the amount.

You can make a new claim as a single person or with a new partner but you must contact HMRC 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 Opens new window

Contact HMRC

You can contact the Tax Credit Helpline on 0845 300 3900 or textphone 0845 300 3909 (open from 8.00 am to 8.00 pm, seven days a week except Christmas Day, Boxing Day, and New Year's Day).

More useful links

• How to avoid being overpaid on your tax credits Opens new window
• How to dispute a tax credits overpayment Opens new window
• Download the HMRC leaflet 'What happens if we have paid you too much tax credit?' (PDF document, 97K) Opens new window
• Help with PDF files