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HMRC have overhauled the way in which they recover tax credits overpayments.
Revenue and Customs Brief 40 (2014) explains that claimants who have been overpaid may have their award reduced to repay outstanding debts from previous claims.
HMRC have overhauled the way in which they recover tax credits overpayments.
Revenue and Customs Brief 40 (2014) explains that claimants who have been overpaid may have their award reduced to repay outstanding debts from previous claims.
Outstanding overpayments may be from one or more previous awards, depending on a person’s circumstances.
The Revenue will continue the recovery method until the overpayment is repaid or the claimant is no longer entitled to tax credits. The tax department will send a revised award notice to the claimant when it starts to recover the overpaid credits, covering the amount owed and its effects on payments.
Claimants with an arrangement to repay debts will not be affected by the change.
A different rate of recovery depending on a household’s circumstances and income will be applied, with those on lowest incomes having debt repayments spread over a longer time.
The maximum recovery rate is 25% of current payments – but households with a limited income that receive a maximum tax credits award may experience only a 10% reduction.
