Introduction
Have you recently received a notice from HMRC about a tax credits overpayment? This guide will help you understand what an overpayment is, how to manage repayments, and what options are available to you. With the right information, you can tackle this issue with confidence. If you need further assistance, Contend’s highly trained AI legal experts are here to help you navigate your legal challenges and ensure you understand your rights. Contend is the Easiest Legal Help in the UK, ready to support you every step of the way.
If you’ve received a notice from HM Revenue and Customs (HMRC) saying you’ve been overpaid tax credits, it’s important to take action quickly. While it can feel overwhelming to pay back money you weren’t expecting to owe, there are several ways to manage the repayment process.
Understanding Overpayment
An overpayment occurs when you receive more tax credits than you’re entitled to. This can happen for various reasons, such as changes in your income or family situation. If you find yourself in this situation, don’t panic; there are options available to help you pay back what you owe.
How to Pay Back HMRC
When HMRC informs you of the overpayment, they will provide instructions on how to repay the amount. Typically, they will deduct the owed amount from your future tax credit payments. This means you’ll receive a smaller amount until the debt is cleared.
However, if you’re no longer receiving tax credits, or if your situation has changed (like moving from a joint claim to a single claim), you may need to pay HMRC directly.
If you can’t find the letter from HMRC detailing your overpayment, don’t hesitate to call the tax credits helpline for assistance. Here are the contact details:
HM Revenue and Customs (HMRC) Tax Credits Helpline
- Phone: 0345 300 3900
- For those who can’t hear or speak: 18001 then 0345 300 3900
- International callers: +44 2890 538 192
- Hours: Monday to Friday, 8 am to 6 pm
Prioritizing Your Debts
Before focusing on your tax credits overpayment, it’s wise to look at your overall debt situation. Make sure you’re handling any urgent debts first. You can use online tools to help you assess which debts to prioritize.
If You Receive Universal Credit
If your tax credits have been replaced by Universal Credit (UC), HMRC can directly request the Department for Work and Pensions (DWP) to reduce your UC payments to cover the overpayment. You should receive a letter explaining how much will be deducted. If this is too much, contact your local jobcentre to discuss adjusting the repayment terms.
Adjusting Your Repayment Plan
If you’re comfortable with how HMRC plans to take back the overpayment, you don’t need to take any action. Your tax credits will automatically adjust until the debt is settled. However, if you need to change the repayment amount or schedule, you can call the tax credits helpline to discuss your options.
You might want to consider making larger payments if you’re being charged interest on the overpayment, as this could save you money in the long run.
What If You Can’t Afford to Pay?
If paying back the overpayment would leave you struggling to afford essentials like food or rent, you can reach out to HMRC to discuss your situation. They may allow you to pause payments or reduce the amount owed. You can explain your circumstances via your personal tax account or by calling the tax credits helpline.
Seeking Help
If you’re feeling overwhelmed, consider trying Contend’s legal expert chat for support. Their highly trained AI legal experts will work with you to provide guidance on how to handle your debt and assist you in communicating with HMRC.
Final Thoughts
Dealing with a tax credits overpayment can be stressful, but remember that you have options. Whether it’s adjusting your repayment plan or seeking help from professionals, taking action sooner rather than later can make a significant difference. If you feel that HMRC has unfairly refused to change your payment terms, you can file a complaint through their official channels.
For more information on how to manage tax credits overpayments, you can visit GOV.UK.
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