II have an overpayment – What can I do about it?

Tax Credit 8 One of the most misunderstood parts of the tax credit system is knowing whether or not you can appeal. Not every decision by HMRC can be appealed.

An appeal is when you ask HMRC to look at their decision again because you think it is technically wrong (not just unfair). You might ask for an appeal if you think HMRC is wrong about the amount of tax credits they say they should have given you. You will need to tell HMRC why you think it is wrong. If you do not accept their decision, you can present your case to a panel of three people (a tribunal) who do not work for HMRC. They will then make a decision on it.

You may have just received more tax credits than you should have. If you agree that you received more than you should have, and that the information they have about you now is correct (for example how many children you have, your disabilities, and whether you are a couple), you have been overpaid. You can’t appeal when they ask you to pay this money back, but you can ask them not to make you pay it back by using the dispute process. See I don’t think I should pay the money back. What can I do? and How to write a dispute letter for details of how to do this. Disputes are decided by HMRC they don’t go to a tribunal.

Sometimes you might want to do both. You can send an appeal letter and a dispute letter at the same time.

Appeal vs Dispute

Appeal	Dispute
You should appeal if HMRC have worked out your tax credit award incorrectly, or decided that you are not entitled to tax credits or some part of tax credits, and you do not agree with this. Daisha was right to appeal Daisha claims tax credits for her 3 children. Her eldest child finished her GCSE’s but decided to stay on at school to do her A levels. Daisha told HMRC and continued to receive tax credits for 3 children. When HMRC work out Daisha’s final tax credits for the year, they only included 2 children. Because Daisha received money for 3 children, HMRC thought that they have overpaid her. Daisha appealed the decision and asked HMRC to change her award as she should have received tax credits for 3 children. If she is successful, the overpayment will disappear.	You should dispute if HMRC have the right information about your income and situation, but for some reason you were paid more than you were entitled to have. Eric was right to dispute Eric and his wife were paid tax credits for 3 children when they only have two. When Eric received his award notice, he phoned HMRC to tell them they had the number of children wrong. HMRC did not correct the mistake and kept on paying Eric too much tax credit. After the end of the year, Eric had received more tax credit than he should have and so has an overpayment. Eric used the dispute process because he doesn’t think he should have to pay it back because he told HMRC of the mistake as soon as he saw his award notice.

Appeal

Dispute

You should appeal if HMRC have worked out your tax credit award incorrectly, or decided that you are not entitled to tax credits or some part of tax credits, and you do not agree with this.

Daisha was right to appeal

Daisha claims tax credits for her 3 children. Her eldest child finished her GCSE’s but decided to stay on at school to do her A levels. Daisha told HMRC and continued to receive tax credits for 3 children. When HMRC work out Daisha’s final tax credits for the year, they only included 2 children. Because Daisha received money for 3 children, HMRC thought that they have overpaid her. Daisha appealed the decision and asked HMRC to change her award as she should have received tax credits for 3 children. If she is successful, the overpayment will disappear.

You should dispute if HMRC have the right information about your income and situation, but for some reason you were paid more than you were entitled to have.

Eric was right to dispute

Eric and his wife were paid tax credits for 3 children when they only have two. When Eric received his award notice, he phoned HMRC to tell them they had the number of children wrong. HMRC did not correct the mistake and kept on paying Eric too much tax credit. After the end of the year, Eric had received more tax credit than he should have and so has an overpayment. Eric used the dispute process because he doesn’t think he should have to pay it back because he told HMRC of the mistake as soon as he saw his award notice.

Tax Credit 7

Time limits for appeals

You must send your appeal to HMRC within 30 days of the decision you want to appeal against. This is normally the award notice that sets out your tax credits award. The 30 days runs from the date on the award notice or decision letter.

If you miss this 30 day time limit, don’t panic. If you can show a good reason why you missed the deadline, you can ask for an appeal up to 13 months after the date on the notice or letter. See How to find an adviser to get help with your appeal.

There are no time limits for disputes.

What should I do?

Man In Playground

"I don’t think I was paid too much?"
You should appeal. See How to Appeal.

"I agree I was paid too much but I don't think I should have to pay it back?"
You should send a dispute letter. See I don’t think I should pay the money back. What can I do?.

"I was overpaid because I was late telling HMRC that my partner had moved in/out, but I would have been entitled to the money if I had made another claim on time.
See I was late telling HMRC about my partner.

"I agree I was paid too much, but I don't think it was as much as HMRC say"
You should send an appeal about the amount that HMRC say you owe that you don’t agree with. AND you should either start paying back the amount you agree you owe (see Paying the overpayment) or send a dispute letter if you don't think that you should have to pay it back. See I don’t think I should pay the money back. What can I do?. You can also get help from an adviser. See How to find an adviser.

"I don’t understand this at all and want HMRC to explain it to me"
Follow the steps under How to Appeal and I don’t think I should pay the money back. What can I do? and send two letters to HMRC. This way you won't miss any deadlines. You can also get help from an adviser. See How to find an adviser.