TCTM11011 | Transition to Universal Credit: Recovery of tax credit overpayments by Department for Work and Pensions / Relevant Northern Ireland Department

Tax Credits Act 2002 section 29

Section 29(4)(b) and 29(4)(c) of the Tax Credits Act 2002 allows an overpayment of a tax credit to be transferred to the Department for Work and Pensions.

Where an overpayment of a tax credit is to be treated as though it were an amount recoverable by the Secretary of State under section 71ZB of the Social Security Administration Act 1992 (Administration Act) or Social Security Administration (Northern Ireland) Act 1992 ((Administration Act (Northern Ireland)) the overpayment can be recovered by the:

• Secretary of State

• by deductions under section 71ZC of the Administration Act (deduction from benefit);

• by deductions under section 71ZD of that act (deduction from earnings); or

• as set out in section 71ZE of that act (court action etc)

(Tax Credits Act 2002 Section 29(4)(b))

• Relevant Northern Ireland Department

• by deductions under section 69ZC of the Administration Act (Northern Ireland) (deduction from benefit)

• by deductions under section 69ZD of that act (deduction from earnings); or

• as set out in section 69ZE of that act (court action etc)

(Tax Credits Act 2002 Section 29(4)(c))

Once a tax credit overpayment has been transferred to DWP, there is no provision for it to be transferred back to HMRC.