Recovery of overpaid tax credits

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

This guidance note looks at how tax credit overpayment arise, and the rules about how and when they are repaid to HMRC.

Migration of tax credits to universal credit

New claims for tax credits are no longer possible as they have been replaced by the universal credit for all claimants. Existing claimants will continue to receive tax credits until they are migrated to the universal credit system. Migration will take place when a change in circumstances is reported or when a migration notice letter is received. This is expected to be completed during 2024. There is further information about migration notice letters on the GOV.UK website.

See the Universal credit guidance note.

Overpaid tax credits

Tax credit awards are provisional until final income figures and circumstances are confirmed to HMRC as part of the renewal process which happens after the end of the tax year of claim.

The amounts received by claimants during the tax year are initially based on income of the previous tax year, and are ‘provisional’ in the sense that the exact

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