How to Dispute a Tax Credit Overpayment: Final Options

Step 6: Your Final Options

If, after the previous steps, you still have a bill outstanding, there are a couple of options that may be suitable.

Legal Aid

First of all, do please check whether you are entitled to Legal Aid. The intervention of a solicitor may help persuade HMRC the case is too much work to continue with.

Hardship Assessment

The other possible option is pleading hardship. If your financial circumstances are very tight, and you can prove this, tell HMRC it would cause you hardship to repay the overpayment and they will perform a means assessment. This basically involves taking details from you of your expenses and income (usually done by phone but they may ask you to send proof of your expense figures). They have allowable amounts for each bill and will then deduct the allowable costs from your income. The remaining figure is considered your ‘disposable income’ and HMRC will allot up to half that figure as your monthly repayment plan. If the amount is very small or you have no disposable income HMRC will agree to delay recovery until your ‘circumstances have improved’ (note; it’s pretty unofficial as to whether HMRC will ever actually come back to you should they agree you are currently in hardship). You don’t have to be in dire straits to request a hardship assessment, but it will only get a bill written off if your finances are very tight.

If you still have a bill, can’t get a write off agreed and can’t afford the repayment plan HMRC have decided, do demand a hardship assessment to get the monthly repayment amounts reduced. HMRC can’t demand a higher rate of repayment than their hardship assessment allows for.

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Who We Are: Tax Credit Casualties (TCC) is a voluntary, unfunded, not for profit UK organisation run by members for members. We offer free advice on how to dispute unfair overpayments based on our own experiences, the experiences of other claimants and HMRC guidelines.

Our Standards: TCC was established to provide advice and guidance on disputing recovery of non-fraudulent tax credit overpayments, and to lobby for fundamental change on the inbuilt flaws and inequalities of the tax credit system. TCC operate in a professional manner and endeavour to give accurate and appropriate advice based on information provided by members. TCC endeavour to respond to members as quickly and efficiently as possible, given the voluntary nature of the organisation and limited resources available. TCC is an inclusive organisation and will treat all members in a fair and equitable manner.

Disclaimer: Please note that we are not tax professionals and are working on a voluntary basis, unpaid, in our free time. Between us, we have a lot of experience and knowledge in this area, gained over the last few years of supporting victims and helping them fight for justice and their rights. Whilst TCC provide guidance and information on how to handle disputes, and even provide an advocacy service in some instances, neither TCC as an organisation nor any participating members are responsible or liable for outcomes of disputes, which remain wholly the remit of HMRC, the Adjudicator and/or the Parliamentary Ombudsman, as appropriate and dependent on the stage of dispute. We cannot take any responsibility for decisions made by HMRC, The Parliamentary Ombudsman, The Adjudicator, or any other organisation regarding claimants cases. Legislation, operating practices and individual cases change all the time, and while we aim to be professional and accurate at all times, please understand the circumstances we are working under and accept our support, guidance and information in the sprit it is offered; goodwill and camaraderie.

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