LJS Accounting Services

What To Do In A Tax Credit Overpayment Dispute

What To Do In A Tax Credit Overpayment Dispute

What should you do in a tax credit overpayment dispute? Being in an overpayment dispute can be difficult and add unnecessary stress to your life.

HMRC should be contacted directly if you’re wanting to reduce your overpayment, and by reaching out to HMRC, you might be able to get back what you’ve overpaid.

Most disputes are only successful if HMRC holds their hands up and admits to making an official error. On average, only one in 10 tax credit disputes are resolved.

At LJS Accounting Services, we understand how difficult it can be to be involved in a dispute, especially one that involves money.

Our dedicated team deals with accounts and offers both advice and services to residents in the UK. If you’re unsure of how to deal with an overpayment of tax credit and need the expertise and advice of a professional, be sure to contact us today.

Continue reading to find out more about tax credit overpayments and how you can open a dispute with HMRC to recover any money.


How Do I Dispute with HMRC?

To open a dispute with HMRC, you’ll have to send a dispute form within three months of finding out that you’ve been overpaid or by the decision date on your Annual Review notice.

To avoid missing the chance of being able to get your overpayment back, you’ll have to improve your organisational skills by getting your dates in order before you send off your forms prior to the expiry date.

HMRC will typically ask for proof that whoever they’re dealing with is who’s owed an overpayment of tax credits – this means that you’ll need evidence of who you are before you attempt to make a claim against them.

After speaking with the right departments, you should have an understanding of how long it could take before you hear anything back. As mentioned, disputes are only resolved if HMRC notice that they’ve made a mistake.


Can You Send a Dispute After 3 Months?

Although there’s a time limit to getting in contact with HMRC over your overpayment of tax credits, there are some exceptions that have been set by the government.

No one wants to be paying back an overpayment of tax credits, so it’s understandable why people go to the extreme to make sure it gets resolved.

The decision is ultimately in the hands of HMRC, but if you explain your circumstances, you could have a strong chance of still being able to send your form off after the three-month deadline.

If you were in the hospital for three months, or seriously injured and unable to deal with your financial issues, you could be told by HMRC that your dispute can go ahead.

When HMRC allows you to dispute past the deadline, it’s something called a mandatory reconsideration. If HMRC checks your reconsideration request and agrees to change its mind about your form, you should get a letter through the post.


What Happens After Starting A Dispute?

After opening a tax dispute, HMRC will carefully review your information and see if you’re eligible for repayment. As mentioned, unless HMRC made a mistake, the chances of getting your tax credit overpayment back are slim.

You’ll receive a letter in the post to your home address which will conclude whether or not you have to repay the tax credits, how much you’ll have to pay and the reasons why they’ve come to that final decision.

It can be frustrating if you don’t get the response you were after, but don’t worry – you can try to change the decision of HMRC by providing new information.


What if I Don’t Agree With the Decision?

Finding out you have a debt to pay off to HMRC can be an inconvenience, especially if it’s at a time when you’re not financially stable. If you don’t agree with the decision that’s been made by HMRC, you can always do the following:

  • Send HMRC new information regarding your tax overpayment
  • Ask HMRC to review the information you’ve sent off and carefully reconsider their decision


Similar to your first initial letter from HMRC, you’ll only have three months to send back your dispute decision letter. We advise you get all the right information together before sending this off, as HMRC only allows your decision to go under review once.

If you have any questions or need expert advice from professionals, feel free to contact a member of our team today to find out more about the services we offer.

Have You Got Any Questions?

Need to talk to someone? Get in touch with one of our consultants today and we will be happy to help.
Share post:

Leave a Reply

Your email address will not be published. Required fields are marked *

Want To Work With Us?

Need to talk to someone? Get in touch with one of our expert accountants today and we will be happy to help you with your matter.