If you have been told you owe money back, this guide explains what a tax credit overpayment is, why it happens, and how to repay HMRC. The single most important fact to know: tax credits ended on 5 April 2025, so no new payments are being made, but you can still be asked to repay money you were overpaid before then.
According to GOV.UK, HM Revenue & Customs (HMRC) will write to you to say exactly what you owe and how to pay it back. If you were eligible for Universal Credit or Pension Credit instead, you should have received a letter about moving over.
Why do I have a tax credit overpayment?
An overpayment happens when you received more tax credits than you were entitled to. GOV.UK lists three common reasons:
- A change in your circumstances — this can cause an overpayment even if you reported the change on time.
- A mistake — made either by you or by HMRC.
- A late renewal — you did not renew your tax credits by the deadline.
Because tax credits closed on 5 April 2025, any overpayment relates to a period before that date. Even so, the debt does not disappear, and HMRC will still expect it to be repaid.
How do I repay HMRC?
The way you repay depends on whether you now receive Universal Credit. GOV.UK sets out two routes:
- If you get Universal Credit: your tax credit overpayment is repaid automatically. HMRC reduces your future Universal Credit payments until the money you owe has been paid back.
- If you have not claimed Universal Credit: you must pay HMRC directly, following the instructions in the letter they send you.
The letter from HMRC tells you the amount and the payment methods available. Follow those instructions to keep your repayment on track.
When should I call HMRC about my overpayment?
You do not have to accept the figure without question. GOV.UK says you should call HMRC if you:
- Think HMRC made a mistake in working out that you were overpaid.
- Want to know how the overpayment was calculated so you can check the figures.
You can reach the tax credits enquiries line through the contact page on GOV.UK: gov.uk/government/organisations/hm-revenue-customs/contact/tax-credits-enquiries. Have your letter to hand so you can quote the details when you call.
What happens if I do not repay in time?
If you have to pay HMRC directly and you do not repay the money on time, HMRC can recover it in another way. GOV.UK explains the alternative recovery options on its dedicated page: gov.uk/tax-credits-overpayments/not-repay-hmrc. If you are worried about affording the repayments, contact HMRC early rather than waiting, so you can talk through your options before the debt is passed on.
How much will I have to pay back?
The exact amount depends entirely on your own case, and GOV.UK does not publish a set figure. HMRC works out the overpayment based on your circumstances and the payments you received, then confirms the total in writing. If the number looks wrong, ask HMRC how it was calculated before you start repaying.
Where can I check the official details?
The full guidance sits on GOV.UK at gov.uk/tax-credits-overpayments, including a printable version and links to related pages. Because the rules around the closure of tax credits and the move to Universal Credit can change, check that page or your HMRC letter for the most up-to-date instructions that apply to you.
To recap the key points on a tax credit overpayment: HMRC will contact you with the amount and how to repay it, Universal Credit claimants have the debt taken from future payments, everyone else pays HMRC directly, and you can call HMRC if you disagree with the figure or want to understand the calculation.
