How overpayments of tax credits can happen

The Tax Credit Office work 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.

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

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

The Tax Credit Office will then send you a new award notice telling you when your new payment will start from.

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.

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.

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

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.

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.