Budget 2021: Predicted measures from Chancellor Rishi Sunak
Claimants of tax credits receive the payment from the Government because they have been assessed as eligible for extra financial support. Claimants of either Working Tax Credit and Child Tax Credit receive regular tax credit payments while claiming, but mistakes do happen and overpayments can be made.
Related articles
Why might you get a tax credit overpayment?
There are a number of reasons why someone may be overpaid tax credits.
One reason is there is a change in the claimant’s circumstances.
Anyone claiming tax credits needs to report any changes to their circumstances as soon as possible.
READ MORE: Sunak's IR35 plan will be 'double whammy of pain' for self-employed
This includes anything such as any changes to employment status and salary.
But the rule also applies to changes in personal circumstances, such as changes in living circumstances or childcare.
HMRC should be informed straight away if there are any changes to personal circumstances, to help prevent overpayments which will need to be paid back.
Even if the claimant has reported the changes to their circumstances on time, they may still find they have been overpaid tax credits.
Another reason why a claimant may be overpaid tax credits is if they or the Tax Credit Office make a mistake.
Someone may also be overpaid tax credits if they do not renew their tax credits on time.