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Dividend Tax Credit

Treasury written question – answered on 7th January 2020.

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Photo of Anneliese Dodds Anneliese Dodds Shadow Minister (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.

Photo of Rishi Sunak Rishi Sunak The Chief Secretary to the Treasury

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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