HM Revenue and Customs (HMRC) is undertaking a thorough review of historic records following the discovery that thousands of people may be owed money due to longstanding errors. The department has acknowledged that mistakes in its records meant some claimants were short-changed, and it is writing to those affected to notify them.
The issue concerns individuals who previously received tax credits, including Working Tax Credit and Child Tax Credit. These benefits have been replaced by Universal Credit, and the tax credits system officially ended on 5 April 2025. However, during the transition, errors were identified where some claimants did not receive an award notice when it should have been issued, leading to unresolved payments.
In a statement, an HMRC spokesperson explained: “Tax credits ended on 5 April 2025 with customers migrating to Universal Credit. We’re reviewing historic accounts and writing to any customers we identify with unresolved awards including unpaid tax credits, with instructions on how they can receive their payment.”
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To date, the department has sent out 170,000 letters as part of this ongoing investigation. HMRC continues to work diligently to identify further claimants who may be owed payments and notify them accordingly.
Some recipients of the letters have expressed surprise, as the correspondence relates to claims dating back many years. For example, one individual contacted HMRC via social media about a letter relating to their claim from the 2006/07 tax year. They stated: “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 responded by clarifying: “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.”
All tax credit claims have now been closed following the transition to Universal Credit. For further information and official guidance on tax credit claims, individuals are encouraged to visit the government website at gov.uk.