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HMRC internal manual

Tax Credits Manual

HM Revenue & Customs
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Payment - overpayments (A-C): overpayments - calculate and remit (cases suspended on or after 30/10/06) (Info)

Contact Centres or Debt Management and Banking (DMB) will

  • make a referral to the Tax Credit Office (TCO)


  • provide the customer with a Code of Practice 26 (COP 26) ‘What happens if we have paid you too much tax credit?’ and form TC846 ‘Request to reconsider recovery of overpaid tax credits’

when a customer asks about when they have been

  • informed of an adjustment to their regular payments of tax credits
  • notified of an overpayment of tax credits that’s being recovered

and the Contact Centre or DMB adviser

  • has been unable to identify a reason for the overpayment
  • has been informed by the customer that they do not agree that recovery of the overpayment is appropriate.

A new award notice will be issued to the customer whenever there is an adjustment to their regular payments or there is an overpayment to be recovered following finalisation of the award.

A customer may contact you in writing to query an overpayment. You must ensure you have all the information you need on the correspondence. If you do not, you must issue a COP 26 and TC846 before making any decision to remit or recover the overpayment.

Note: If the customer contacts us about an overpayment that we will be collecting by changing their PAYE tax code, ask them to put this information on the correspondence they send to us.

For information on how the computer will recover an in-year adjustment, cross-year adjustment or a cross award adjustment, follow the guidance in TCM0232200.

During your investigation of an overpayment, you will be directed to one or more of the following instructions

You will then either

  • carry out remission of all or part of the overpayment


  • reinstate recovery of the overpayment.

Note: If Compliance is carrying out the investigation, they will follow the guidance in ‘Make or Cancel Remission’ in the Claimant Compliance Operational Manual.

If there is more than one reason for the overpayment, you must determine if the amount should or should not be recovered for each reason.

There is an Action Guide for this subject, select TCM0224140 to access it