HMRC has issued an update about letters being sent to some DWP benefit claimants. The issue relates to a historical error where the tax body is contacting people to correct the problem.
A customer contacted HMRC via social media, confused about a letter they received. Posting on August 6, they asked: "Please could you explain why I received a letter from you yesterday relating to my tax credit claim from 2006-07."
Incorrect status discovered
The social media team initially responded that they couldn't view customer records to confirm the reason for the letter, and asked if the letter indicated an overpayment. The customer replied: "I'm just wondering why you are sending letters relating to claims from 20 years ago. It's not showing an underpayment or overpayment."
HMRC then explained: "During the ongoing process of closing tax credits, it was discovered that some awards had an incorrect finalised status and an award notice was not issued when it should have been. We are fixing the affected cases and this is generating the issue of finalised award notices. If all the information on the notice is correct, you don't need to take any action."
The customer thanked HMRC for the clarification but called it a "huge waste of money" to send letters over an issue dating back 20 years.
Tax credits end
Tax credits ended on April 5, 2025, as people on Child Tax Credit or Working Tax Credit moved to Universal Credit, administered by the DWP. Those previously on tax credits should have received an Annual Review letter. Government guidance states: "You'll get a letter called your Annual Review when your tax credits award ends. This will say how much you’ve been paid up to 5 April 2025. This is different to your normal tax credits renewal letter. You’ll need to check that the information in the letter is correct (known as 'finalising' your tax credits)."
If a mistake is found, claimants must contact HMRC before the deadline in the letter. The guidance warns: "If you do not contact HMRC before the deadline, they’ll use the information they have to finalise your tax credits. You might be underpaid tax credits or overpaid tax credits."
