Tax Credits Overpayments - What is an overpayment?

Tax credit awards are calculated annually and your award for a year is only finalised after the end of that tax year . An overpayment of tax credit will be calculated if you received:

• more than your entitlement for that year, or
• a payment to which you were not entitled.

Your tax credit entitlement may be adjusted within a tax year to avoid an end-of-year overpayment.

A tax credit overpayment can happen if:

• You give incorrect or incomplete information when making or renewing a claim.
• You fail to notify a change of circumstance.
• You don’t report significant increases in income.
• You don’t renew your tax credits on time.
• HM Revenue and Customs (HMRC) make an error.