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Disputing paying back a working or child tax credits overpayment

This advice applies to Scotland

If HM Revenue and Customs (HMRC) have told you to pay back an overpayment, you can dispute having to pay all the money back if:

  • you think HMRC made a mistake
  • you couldn’t do everything you were meant to but had a strong reason, for example you were seriously ill

You also might not have to pay all the money back if you were overpaid because you were late reporting a change in your relationship. You can ask HMRC to take what you should have got if you’d reported the change in time off your overpayment. 

If you don’t think you’ve been overpaid, you’ll first need to challenge HMRC’s decision. See challenging a tax credits decision for how to show you were entitled to the tax credits.

How to dispute paying back the overpayment

The best way to tell HMRC you don’t think you should pay back an overpayment is to fill in a dispute form on GOV.UK. Filling in the form makes it easy to include all of the information HMRC needs - and you save the cost of postage.

Visit your nearest Citizens Advice if you need help filling in the dispute form.

If you can’t fill in the form online, you can write HMRC a letter. In the letter, explain why you shouldn’t pay back the overpayment and include photocopies of any evidence.

Send it to the address on the letter that told you about the overpayment. If you can’t find the overpayment letter, send it to:

HMRC Tax Credit Office
Preston
PR1 4AT
United Kingdom

HMRC will need to get your completed form or letter within 3 months of whichever is the latest:

  • the letter that told you about the overpayment - this is known as a ‘final award notice’
  • the letter that told you your payments have stopped if you didn’t complete your annual renewal
  • the date HMRC said they'll decide what you’ll get after your claim is automatically renewed - this is usually 31 July
  • the letter that gave you your mandatory reconsideration decision
  • the letter that told you your appeal decision

If you miss the 3 month deadline, HMRC should still accept your form if you had a strong reason for the delay. For example, if you were in hospital for those 3 months.

If they don’t, you can make a complaint to try and get your late form accepted.

Preparing your dispute form or letter

It’s a good idea to find out why HMRC thinks you’ve been overpaid. Then when you fill in the dispute form or write your letter, you can clearly explain why you disagree with their reasons.

HMRC will have written to tell you they think you’ve been overpaid and when they want the money back. It might not be clear in the letter why HMRC thinks you’ve been overpaid - so for more details, call the tax credits helpline.

HMRC tax credits helpline
Telephone: 0345 300 3900
Textphone: 0345 300 3909
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm
Sunday, 9am to 5pm

Calls cost up to 12p a minute from landlines and 45p a minute from mobiles. It should be free if you call from your mobile and have landline calls included in your contract. 

Make a note of the date and time you call. Also write down the name of the person you spoke to and the HMRC office they work in - for example Preston or Belfast. You might need to refer to the call later in your dispute.

If you think HMRC made a mistake

HMRC must do certain things to ensure your claim is treated correctly - known as ‘meeting their responsibilities’. You can ask HMRC to reduce your overpayment if they haven’t:

  • paid you the right amount
  • given you the best advice based on the information you give them
  • correctly recorded your information and any change of circumstances you tell them about
  • put right any mistakes you’ve told them about
  • confirmed in writing how much tax credits you’ll get within 30 days of telling them about a change of circumstances

To get the whole overpayment cancelled, you’ll need to have met all of your responsibilities. These are:

  • giving HMRC accurate and up-to-date information
  • reporting changes of circumstances - usually within 1 month
  • checking your payments match what’s in the award notice
  • telling HMRC about any mistakes in your award notice within 30 days - using the checklist sent with your award notice

Explain in the dispute form or your letter why you think HMRC didn’t meet their responsibilities - and how you met all of yours.

HMRC should cancel the overpayment if you met all of your responsibilities but they didn’t meet all of theirs.

You’ll usually have to pay back some of the overpayment if HMRC thinks you both failed to meet some responsibilities.

If you had a strong reason for not meeting your responsibilities, explain this in the dispute form. For example, if you or a close family member were seriously ill.

If you think HMRC is asking you to pay back too much, you can write to them. In your letter, explain how you met your responsibilities and ask them to reduce the amount.

HMRC Tax Credit Office
Preston
PR1 4AT
United Kingdom

Call the tax credits helpline if it’s close to the 3-month dispute deadline - it will be quicker than writing.

If you were late reporting a change in your relationship

You can get the amount you have to pay back reduced if you were late changing from a single to a joint claim, or from a joint to a single claim.

You’ll need to ask HMRC to reduce your overpayment by taking what you should have got from what you were actually paid. This is known as ‘notional offsetting’.

Call the tax credits helpline and ask for your claim to be passed on to the notional offsetting team. 

You can also write to the notional offsetting team. Write ‘Request for notional offsetting’ at the top of your letter and include:

  • the date you should have changed from a single to a joint claim, or from a joint to a single claim
  • the date you actually changed your claim
  • why you couldn’t make the claim on time

Send your letter to:

Customer Service Support Group
The tax credits office
Preston
PR1 4AT

There’s no deadline, so it’s worth asking HMRC to offset the overpayment even if you should have reported the change months ago.

It’s important to explain why you didn’t report the change straight away when you fill in the form. For example, because you were moving out of the home you shared with your partner. You should send any evidence you have to support your reasons. For example, a copy of your new tenancy agreement.

If you can’t afford to pay back the overpayment

You can call the tax credits helpline and ask to pay back the overpayment in smaller amounts over a longer period of time.

If you would really struggle to pay the money back, you can ask for the amount you have to pay back to be reduced or even cancelled. For example, if you’re seriously ill and won’t be able to return to work.

You’ll need to explain why it would be very difficult to pay the money back. HMRC might ask you to send them proof of why you can’t afford the repayments.

While you’re waiting for HMRC’s decision

You might still need to start paying HMRC back, even if you haven’t done anything wrong. You’ll get this money back if you get your repayment changed.

You don’t have to pay a large amount in one go, you can ask to pay in small instalments. It’s best to do this rather than not pay anything at all. See paying back a tax credit overpayment for how to deal with these repayments.

If HMRC won’t change their decision

You can ask HMRC to look at their decision again, but you’ll need to provide new evidence. For example, if you’ve got a copy of what was said on a phone call to HMRC.

You must do this within 30 days of getting their decision not to change your repayments - unless you have a strong reason for the delay, for example you were seriously ill.

Write to HMRC explaining why you think what you have to pay should be changed  - and how the new evidence supports this. Send your letter to the address on the letter that told you HMRC won’t change your repayment. Include photocopies of any new evidence.

It's a good idea to send your form and copies of any evidence by Royal Mail Signed For and keep the receipt - you might need to prove when you posted it and when it arrived.

If you need help writing your letter, visit your nearest Citizens Advice. Tell them when the 30-day deadline is and they’ll book you an appointment before then.

Complaining about HMRC

You can make a complaint about HMRC if they refuse to change your repayment after you’ve sent them new evidence.

You can make a complaint by calling or writing to the office that’s been dealing with your dispute - the contact details will be on the letter that told you HMRC won’t change your repayment.

If you can’t find this letter you can make a complaint on GOV.UK or call the tax credits helpline.

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