Tax Credits: Future policy
In this section you will find information about future tax credits policy changes for 2014-15 and later years.
Most of the changes to the system from now on will be to aid the transition of tax credits claimants to Universal Credit. You can find the detail about the stopping of tax credits and transition to UC in our transition to UC section of the site.
Changes from April 2014
HMRC announced in the Autumn Statement 2012 that they would be introducing cross award recovery from April 2014. Currently, where an overpayment debt exists on a claim that has ended, it cannot be recovered against a later tax credits claim even if that claim is made by the same person. Instead the debt is passed to Debt Management and Banking for direct recovery.
The legislation has never prevented cross claim recovery, but the HMRC IT system was unable to do this. Given the growing amount of overpayment debt, and the fact it is likely to increase over the next few years, HMRC will introduce a change to their IT to allow cross claim recovery.
Whilst this sounds simple in theory, there are several issues that will need to be addressed if the policy is to work smoothly especially for people who incur an overpayment in one capacity (for example as a single person) and joint a claim in a different capacity (as part of a couple). We will add further information once it is announced by HMRC.
Updated 12 April 2013