I don’t think I should pay the money back. What can I do?
If you want to ask HMRC not to take the money back from you this is called a ‘dispute’. You can do this even if you cannot appeal. You can also do this at the same time as an appeal if you are not sure why you have an overpayment.
Although there are strict time limits for appeals, there aren't for disputes.
The dispute process is explained in the HMRC leaflet COP 26 (you can download it using the link on 'Links to other websites' or phone the tax credit helpline on 0845 300 3900 and ask for a copy).
There are two ways to lodge a dispute. You can use a form (called a TC846, see Further help for how to get it), or you can write a letter. You can find help on how to write a letter on How to write a dispute letter.
As soon as HMRC receive your form or letter, they should stop asking you to pay the money back until they have made their decision. If they are taking money from your tax credits, they should stop doing this until they have made their decision.
Top tip! Keep a file
It is a really good idea to keep all your tax credit stuff in a file.
- Keep copies of your award notices and any other letters you receive about your tax credits.
- Keep copies of any letters and forms you send to HMRC.
- Keep a record of any phone calls you make to HMRC. Include the date, time and the name of the person you spoke to.
- If you are sending important letters to HMRC, send them using registered post so that someone signs for it and put your proof of delivery in the file.
How do HMRC decide if I have to pay the money back?
When your dispute form or letter is received, HMRC will decide if you have to pay the money back. They can make one of three different decisions:
1. They can decide you have to pay all of the money back
2. They can decide you have to pay some of the money back
3. They can decide that you do not have to pay any of the money back
HMRC make their decision by checking if you have done certain things. HMRC call these your ‘responsibilities’. They also check to see if they have done what they were supposed to do. Have a look at the box below to see a full list of the things you have to do and the things HMRC has to do.
- If you have done everything you were supposed to and HMRC have not, you will not have to pay back the money.
- If you have not done everything you were supposed to, but HMRC have, then you will have to pay back the money. If there was a good reason why you could not meet your responsibilities, HMRC might not ask for the money back. This is called ‘exceptional circumstances’. You should write a letter to HMRC telling them the reasons why you could not meet your responsibilities.
- If you have not done everything you were supposed to, but neither did HMRC, then you may only have to pay some of the money back.
| HMRC's responsibilities | Your responsibilities |
|---|---|
They have to give you the right advice based on the information you give them. | You must give them correct and up-to-date information. |
They shouldn't make any mistakes in working out how much you should get and paying it to you (unless you give them wrong information). | You should tell them about any change to your circumstances. You must report certain changes within one month. |
If you tell them about a mistake on your award notice, they should correct it and send you a new award notice. | Every time you get an award notice, you should check everything is correct. Use the checklist that comes with the notice to do this. If there is a mistake, you have to tell them within one month. (It is helpful to keep a note of when you tell HMRC of a mistake). |
If you tell them about a change (like a different job, or someone moving in or out) they should change the amount you get within 30 days (provided you have given them all the information they need). | You should check that the payments you get are for the same amount as it says on your award notice. |
Evidence
Very often, HMRC say that you have to pay money back because they cannot find any proof that you met your responsibilities. For example, they may say that they cannot find any evidence that you told them about changes to your situation. When you write your dispute letter you should try to remember when it was that you contacted HMRC. If you cannot remember, you can ask HMRC for a copy of telephone calls and their notes about you. You can do this by writing to:
HM Revenue & Customs
Subject Access Request Team
Floor 1 Area E
St Marks House
Stanley Street
Preston
Lancashire
PR1 4AT
They do not always have copies of everything, but it may help your dispute. For example, HMRC have admitted they did not record all telephone calls from January 2003 to September 2004. If you think you told them about something during this time you should give as much information as you can remember. HMRC should accept what you have said unless they have any proof that you are wrong.
Do not wait to get copies of their notes about you before you send a dispute. This is because HMRC will not stop asking you for the money if you only ask for your notes.
Martha’s story
Martha claimed tax credits for her two children. She told HMRC on 1st October that her oldest son had left home that day. HMRC did not do anything when she told them. Instead they kept on paying her the money for her son for 4 months. When they did make the change, they decided Martha had been overpaid because she had received more money that she should have. Martha sent a dispute letter to HMRC. HMRC decided that they had not met their responsibilities, and that Martha had met hers because she told them straight away about her son leaving home. The decision was that Martha would not have to pay back any of the money, except for the first 30 days. This is because HMRC have 30 days to make a change that you report.
