Research and analysis

Tax credits: debt transfer

This research tested communications and guidance products around the transfer of tax credits debt to DWP from 6 April 2016.

Documents

Tax credits: debt transfer

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Details

Tax credits are being phased out and replaced by Universal Credit (UC). Eventually all tax credit customers will have either migrated to UC or will have otherwise left the tax credits system. This migration began in April 2013 for a limited number of claimants. Numbers are steadily increasing as the gateway opens – but currently remain low.

A large proportion of tax credits customers have outstanding tax credits debts involving single and joint claims (which customers can be unaware of). These debts will transfer across to UC for recovery when the customer migrates. The transfer of these debts is new to UC and new products and IT systems are being developed to support the management of this.

This research tested the communications and guidance products around the transfer of tax credits debt to DWP from 6 April 2016, for recovery from UC payments. The findings identified some areas for improvement in the draft letters and gov.uk content which were made for implementation.

Published 10 August 2016