Dividend Tax Credit

(asked on 19th December 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many tax credit overpayments were made in each of the last 12 months; and what the average repayment was.


Answered by
Rishi Sunak Portrait
Rishi Sunak
Prime Minister, First Lord of the Treasury, Minister for the Civil Service, and Minister for the Union
This question was answered on 7th January 2020

Overpayments are a feature of the annualized tax credits system. Figures for the value of overpayments relating to 2019-20 tax credits awards will not be known until all awards have been finalised in January 2021.

The most recent estimate of overpayments relates to the 2017-18 award year and can be found in the following publication.

https://www.gov.uk/government/statistics/child-and-working-tax-credits-statistics-finalised-annual-awards-supplement-on-payments-2017-to-2018

In this year, 1.45 million tax credits awards had an overpayment at the point of finalisation. The total value of overpayments was £1.55 billion.

Estimates of the average value of repayments in each of the last 12 months are not readily available. Tax credits repayments are repaid through a number of routes, including through the Universal Credit (UC) system. Information on the monthly value of all these repayments could only be collected at disproportionate cost.

For the year 2017/18, HMRC received repayments of £1.29bn. These repayments were made on overpayments from all previous award years. On top of this, £188m of tax credits overpayments transferred to DWP as customers migrated to UC.

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