Back dating tax credits
The TC610 informs claimants that the debt can be repaid over a longer period, but does not set out any specific timescales or options.
Instead it encourages claimants to contact the payment helpline.
DM will check whether the debt can be passed to one of the private debt collection agencies (DCA) that HMRC uses.
If the case has a domestic violence marker, or a claimant or partner has died recently, or there is an outstanding appeal the case will remain with DM otherwise it will be passed to the DCA.
It encourages claimants to contact the payment helpline on 03.
If no contact can be made, or the claimant refuses to make a payment arrangement, HMRC may consider using one of their enforcement powers such as taking control of goods (distraint) or county court action to recovery the debt.If that claim has ended, or if the claim is a ‘nil’ award (entitlement exists but no payments are due as income is too high) then HMRC will send the debt to their Debt Management (DM) arm for collection by direct recovery.HMRC introduced new IT from October 2014 to allow ‘cross claim’ recovery whereby overpayments on a claim that has ended can be recovered from a subsequent new claim even if it is made in a different capacity (for example an overpayment from an old single claim can be recovered against a new claim as a couple).See below for more detail about how cross claim recovery works.
Tax credit overpayments can also be recovered from payments of Universal Credit and DWP have a power more widely to recover tax credit debts by any of the methods it uses to collect its own debt.This guide was incredibly helpful in setting out the process that HMRC used to recover debts.