Compliance issues for tax credits

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

This guidance note looks at the risks of mistakes and errors in tax credit claims and HMRC’s compliance approach. It also reviews penalty provisions and when these may apply. Note that tax credits cease on 5 April 2025. New claims for tax credits are no longer possible and no more payments will be made after 5 April 2025. Any existing claimants will be migrated to the universal credit system. See the Universal credit guidance note. There is information about migration notice letters on GOV.UK.

Complexity of tax credits and risk of fraud

This guidance note explains the compliance issues to be aware of in relation to an individual’s tax credit affairs.

The Recovery of overpaid tax credits guidance note should be read in conjunction with this note.

Tax credits are extremely complex, and claimants often make mistakes in their claims. This can present problems when claimants have overlooked an important deadline. They can be left with significant debt as a result of their own mistakes.

There is also the issue of fraud. Unfortunately, the tax credit

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