Suggested Steps To Disputing A
Tax Credit Overpayment Bill

Please read this page first!

NOTE: if you have a Tax Credit court case pending against you, see Stopping Court Cases for emergency steps to get the court case stopped!

Please be aware that Disputes and Appeals are very different processes. You can only Appeal if you have what’s called an ‘entitlement issue’. See this page for The Difference Between Disputes And Appeals.

Background & Introduction To Disputing

Since April 2013 HMRC have introduced a 3 month time limit on starting a dispute. This means you are expected to start the dispute within 3 months of being notified of the 'decision' that results in an overpayment.

However, in practice there can be problems in doing so, including serious ill-health of the victim / claimants delaying starting a dispute and not being notified of the overpayment by HMRC until more than 3 months has elapsed since the 'decision' was made.

If this is an issue in your case, please start the dispute anyway, and if the '3 month' issue comes up, please argue for 'discretion' explaining what caused the delays. (Please note that if the overpayment was due to clear 'official error' that you could not be expected to correct, the time limit is up to 5 years, so if Offical Error is a cause please do raise this specifically using the phrase 'official error').

The following guide describes the Dispute process only, because the majority of overpayments can only be dealt with through the dispute process.

Note that there is not actually a very well defined route through this process. Sometimes you may be bounced back and forth, out of order. but during that time they cannot (read "should not"; but you can get it stopped if they try) recover money, add fees or summon you to court. Although this guide seems long, you do not have to do everything at once. Most of it is waiting for one stage to finish before another one can start. If you experience demands to repay during disputing please see this page: Harassment.

Our guide is long because I want people to have as much information as possible, but it is broken down into sections that you should only need to use one at a time. So please don't skim read, thinking you have to read all the sections at once. Instead focus on understanding the stage you are at and what you need to do currently.

The guide has been updated since HMRC moved away from the previous 'reasonableness test' to the current 'responsibilities test'

A couple of tips for you:

  • Don't supply lots of detail during the first stage, so as to avoid falling foul of the need for 'new evidence' to go on to later rounds of the dispute.
  • When writing dispute letters aim to get them to give you the answers to what happened and when, even if it only comes out at that stage’s refusal, because then you can use that information for the next stage. Get them doing the leg work, not you.
  • Defend yourself on the basis of HMRC’s claims against you. i.e. don’t fight points they aren’t trying to blame on you. However, do include any HMRC mistakes, whether they acknowledge them or not.
  • Keep your points relevant. HMRC are looking to blame you because apparently you ‘should have known the award payments were wrong’. Discussing political opinions, other benefits you have or haven’t had problems with, or in-depth details of your employment or personal life will only be ignored. However if you suffered mental heath problems, loss of a loved one, major illness or other trauma around the time the overpayment occurred, do make sure to emphasise this. Most of the dispute will focus on whether you met the responsibilities outlined in COP26. (see page 3 of COP26).
  • Deadlines issued by HMRC are deadlines to respond, not repay. So if a letter demanding recovery states a deadline make sure to contact them by that date to say you are continuing to dispute.
  • Do not discuss details of a dispute over the phone with HMRC. Ring to inform them a dispute is on the way if you’re cutting a deadline fine, but do not handle the dispute over the phone, regardless of who rang who. You have a far better record of who said what and when if you deal with everything by letter. You also have far more time to compose your answers and focus on the issues properly. Don’t let them catch you in a rush.If HMRC ring you, refuse to discuss the details. Instead, insist they write to you because you 'find the calls distressing and confusing'.
  • Don't let them in if they turn up on your doorstep (tell them you are in dispute and will not discuss it in person) and do not agree to a meeting. Insist the dispute be handed in writing if they try either of these. It’s rare that they attempt this, but forewarned is forearmed.

Now please work your way through our 6-step dispute guide using the tabs at the top of this page.

For reference, the HMRC internal manual on how they are supposed to process a dispute can be found here, but we have designed our guide so that it is not essential for you to try to read and understand the HMRC manual.