“This cycle happens year after year of an award and means that recipients can (and often do) receive multiple notifications of an overpayment (debt) which each set out the opportunity to challenge. “When someone claims Universal Credit, this will trigger HMRC receiving a Stop Notice and subsequently, the tax credits recipient will be sent a notice telling them about the crystallised debt before it is transferred to DWP (Universal Credit team).
“This notice essentially confirms the debt amount, and the fact that HMRC will send it to the Universal Credit team for collection. If a taxpayer comes out of tax credits before claiming Universal Credit, they will receive a further notification which confirms the debt amount and the means of recovery.
“Those who have had a break between claiming tax credits and Universal Credit will have also received a ‘Notice to Pay’ informing them of the debt position and the need to contact HMRC to arrange repayment. If they do not contact HMRC on receipt of this notice, they will receive regular correspondence reminding them of the need to pay.”