Tax Credits Act 2002 section 29

Recovery of overpayments

Section 29 sets out how HMRC recovers tax credit overpayments once they have been identified under section 28, including the formal notice requirements and the different recovery methods available.

• HMRC must issue a formal notice to the person (or each person in a joint claim) specifying the amount of the overpayment that is to be repaid.
• The notice must state which recovery method applies, and HMRC can replace a notice at any time with a new one specifying a different recovery method.
• There are three possible recovery routes: direct recovery as if the amount were unpaid tax (via the Taxes Management Act 1970), deduction from future tax credit payments or social security benefits or earnings, or adjustment through the PAYE system as if the overpayment were an income tax underpayment.
• Different parts of an overpayment can be recovered using different methods, and recovery through social security deductions or court action can be carried out by the Secretary of State in Great Britain or by the relevant Northern Ireland Department in Northern Ireland.

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