Tax Credits Ended: Final Awards and Overpayments 2026/27

Child Tax Credit and Working Tax Credit ended on 5 April 2025. No new awards or ongoing tax-credit payments exist in 2026/27. Former claimants may still need to check a final award, correct HMRC information, receive a late final payment or repay an overpayment.

This guide explains the post-closure position. Universal Credit or Pension Credit may now provide support, but they are separate benefits with different eligibility and reporting rules.

What ended on 5 April 2025?

• Working Tax Credit and Child Tax Credit awards ended.
• No further ordinary tax-credit payments are made.
• New tax-credit claims and renewals are unavailable.
• Eligible working-age claimants were directed to Universal Credit.
• Some pension-age claimants responsible for children were directed to Pension Credit.

A historic HMRC letter, correction or payment does not mean the tax-credit system has reopened.

Check your final Annual Review letter

HMRC sends a final Annual Review showing the amount paid up to 5 April 2025 and the information used to finalise the award. Check:

• household members and relationship status;
• children and qualifying childcare;
• employment and working hours;
• income for the relevant final period;
• changes already reported to HMRC;
• payments received and any overpayment balance.

If the information is correct, the letter may say no action is required. If it is wrong, contact HMRC by the deadline shown on the letter. Missing that deadline can cause the award to be finalised using incorrect figures.

Why HMRC may contact you in 2026/27

Post-closure contact can still concern:

• a final underpayment or corrective payment;
• a tax-credit overpayment;
• information needed to finalise a historic award;
• an appeal, mandatory reconsideration or complaint;
• recovery through Universal Credit or directly by HMRC;
• verification of identity or bank details.

Use official GOV.UK contact details. Be cautious with unexpected messages asking for passwords, codes or payment through unusual methods.

Final tax-credit underpayments

If the final calculation shows HMRC owes money, a corrective payment may still arrive after closure. HMRC announced that some final tax-credit payments would be made in 2026. A late payment is settlement of the historic award, not a new 2026/27 entitlement.

Check the bank reference and final award notice, and keep both for Universal Credit, debt and tax records.

Tax-credit overpayments

An overpayment can arise because household circumstances or income changed, information was late, an estimate differed from the final figure, or HMRC made an adjustment. Closure does not cancel the debt.

If you receive Universal Credit, recovery may be made by reducing future Universal Credit payments. Otherwise HMRC may request direct repayment or use another recovery route. If you disagree, ask for the calculation and follow the challenge process within the stated time limit. If the amount is correct but unaffordable, contact the collecting authority promptly to discuss repayment.

Universal Credit after tax credits

Universal Credit is not administered as a continuation of tax credits. It is normally assessed monthly using current household circumstances, earnings, housing costs, savings and other factors. Starting a Universal Credit claim historically ended a tax-credit award even where the Universal Credit claim did not ultimately produce a payment.

Tax-credit claimants who moved after receiving a valid Migration Notice could qualify for transitional protection if they claimed by the specified deadline and met the conditions. The migration deadline for tax-credit claimants has passed; do not assume transitional protection can now be created by making a late voluntary claim.

Pension Credit route

Some people over State Pension age who were responsible for children may have been directed toward Pension Credit rather than Universal Credit. Pension Credit has its own income, capital and household rules. Check entitlement directly rather than relying on an old tax-credit amount.

Appealing or correcting the final award

1. Read the decision and identify its deadline.
2. Compare HMRC’s figures with payslips, P60s, childcare records and earlier notifications.
3. Contact HMRC immediately if personal information is wrong.
4. Use the formal mandatory-reconsideration or appeal route where the decision requires it.
5. Keep copies of forms, letters, online messages and proof of posting.
6. Ask for debt recovery to be reviewed if a live dispute affects the balance.

The correct process depends on whether the issue is an unfinalised award, a formal decision, an overpayment-recovery dispute or official error.

Benefits and tax are different systems

Tax credits were means-tested benefits despite being administered by HMRC. A final tax-credit adjustment is not employment income and is not entered as ordinary taxable earnings on a Self Assessment return. Universal Credit and Pension Credit are also generally tax-free, although other benefits and pension income can have different tax treatment.

Records to retain

• final Annual Review and award notices;
• migration notices and claim confirmations;
• income, childcare and household evidence;
• payment and overpayment statements;
• appeal or reconsideration documents;
• repayment arrangements and Universal Credit deductions;
• HMRC contact notes and reference numbers.

Keep records until the final award, challenge and any debt have been fully resolved.

2026/27 action checklist

• Do not attempt to renew or reclaim tax credits.
• Check every final HMRC award letter carefully.
• Report an error by the letter’s deadline.
• Confirm whether any 2026 payment is a historic underpayment.
• Verify an overpayment before agreeing repayment.
• Check Universal Credit or Pension Credit independently.
• Use official contact channels and retain evidence.

Official guidance

• GOV.UK: tax credits ended and finalising your award
• GOV.UK: tax-credit overpayments
• GOV.UK: moving to Universal Credit
• HMRC: tax-credit enquiries after closure

This guide provides general information for 2026/27. Benefit decisions and challenge deadlines depend on the notice received.