Tax Credits Act 2002 section 28

Overpayments

Section 28 sets out the rules for dealing with overpayments of tax credits, including how they arise, who is liable to repay them, and HMRC's powers to reduce or recover them.

• An overpayment arises when the amount of tax credit paid for a tax year exceeds the claimant's actual entitlement, and HMRC may require all or part of the excess to be repaid or treated as recoverable under social security legislation.
• For single claims the claimant is liable to repay the overpayment; for joint claims both claimants are jointly and severally liable unless HMRC allocates a specified share to each.
• Where HMRC identifies a likely overpayment during the tax year, it may amend the current award or any other tax credit award to reduce or eliminate the overpayment, but only before the final decision for that year has been made.
• If an award is terminated because the claimant never met the basic entitlement conditions for child tax credit or working tax credit, HMRC may treat all or part of the amount already paid as an overpayment subject to recovery.

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