If you had your tax credits wrongly stopped by HM Revenue & Customs contractor Concentrix, you may be able to claim compensation on top of backdated payments, MoneySavingExpert.com can reveal – and some have already been sent up to £100.

HMRC has previously been tight-lipped over whether the thousands of people who had tax credits stopped in error could be due compensation.

But some hit by the mistakes are now reporting receiving letters of apology and cheques or bank transfers to compensate them for inconvenience suffered and other costs incurred, such as bank and phone charges.

HMRC's told us you can claim compensation now even if you've already had your tax credit payments restored. Here's what to try if you believe you should be able to claim – see our Concentrix help guide for full info on appealing a tax credits decision.

If your credits have been cut, appeal that decision first

It's important to understand that if you want to try to claim compensation, that's separate to appealing the decision to cut your credits.

If you believe your tax credits were wrongly stopped you need to go through HMRC's appeals process – see our Concentrix help guide for more info on how it works. You can ask HMRC's tax credit office for updates on your case by phoning it on 0345 300 3900 or using its webchat service.

If you're still having problems, some claimants have had success getting their MP involved. You can find out who your MP is and how to contact them via the WriteToThem website.

After you've done that, separately consider if you could be due compensation, and follow the tips below.

Who can claim compensation on top of backdated payments?

There's no clear-cut guidance on this, but HMRC says it will pay redress "where it is evident that Concentrix have made a mistake or that their actions have caused undue worry or distress".

You can claim for compensation now even if you've already appealed a decision to cut your credits and had payments backdated.

We've had several separate reports of people receiving compensation, with the typical amount awarded ranging from £50 to £100.

Martin Lewis
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How do I claim compensation?

If you want to try to get compensation for the inconvenience you've experienced, you'll need to file a complaint. To do so, HMRC says you should write to it, clearly setting out:

  • How long you had to wait for your case to be dealt with
  • How you felt your case was handled
  • Any stress or ill effects on your health it caused you
  • Any difficulties you experienced
  • Any costs (eg, bank charges, phone charges) directly incurred while your case was being dealt with
  • Any other information about the hardship you've faced that you think validates your complaint

    While those we've heard from who have received compensation haven't necessarily asked for anything directly, if you believe you should be due a specific amount (for example, because you incurred certain costs), it's worth making that clear in your letter.

    The address to write to is: HM Revenue & Customs – Tax Credit Office, Preston, PR1 4AT. Your complaint will be handled on an individual basis by a dedicated complaints team.

    'HMRC sent me £100'

    Paul Eite, a single parent from Portsmouth who gave evidence to MPs on the issue, told us: "I complained about the time of phone calls, the costs incurred – £52 approximately – and general inconvenience. I then received £100. I didn't even ask – I just complained."

    Rachel Bloomfield, also from Portsmouth, said she received a cheque for £100 after emailing HMRC's chief executive directly.

    "I sent three emails explaining my situation, how disgusted I was and how the stress of having no tax credits for eight weeks had a negative effect on my health conditions," she said. "HMRC sent me a letter acknowledging they did not deal with my tax credit claim as well as they should have and sent me £100 because of the worry and distress their actions caused."

    One of the letters from HMRC, seen by MoneySavingExpert, says: "I am sorry if the checks carried out by Concentrix on our behalf have caused you concern. To apologise for the poor service and to cover your costs, we will send £100 to your bank account in the next 21 days."

    The letter, signed by HMRC chief executive Jon Thompson, contains a further apology later on: "I am sorry to hear of the problems you had telephoning to discuss your tax credits claim."

    If you've successfully complained to HMRC about your tax credits and have received a cash gesture of goodwill, please email news@moneysavingexpert.com.

    What can I do if I'm in severe financial difficulty because my tax credits were stopped?

    You can request a 'hardship payment'. This is usually a loan that you can only get if you're struggling to meet your basic needs or those of your children (such as accommodation, heating, food and hygiene costs).

    To apply for this, contact the tax credit office on 0345 300 3900 or use HMRC's webchat service to explain that you are in severe financial difficulty. You may be able to negotiate to receive your tax credits repayment as a lump sum, or you may be offered other short-term financial options such as the hardship loan.

    If you're in urgent need then you may be able to get vouchers to pay for food, clothing or fuel from your local welfare assistance scheme. Charity Child Poverty Action Group lets you search if your council offers this scheme.

    Your council or Citizens Advice may also be able to direct you to other help available in your area, including any food banks that operate. The Trussell Trust is one of the largest networks of food banks and you can search its website for one in your area.

    Will there be any further investigations into the Concentrix/HMRC shambles?

    The National Audit Office (NAO) is investigating – if you'd like to offer evidence, you can email it at enquiries@nao.gsi.gov.uk, putting 'HMRC's contract with Concentrix study' in the subject line. The NAO has said that while it will consider all evidence provided, it may not be able to respond.

    Unsure if you're due tax credits? Check our Tax Credits guide or Benefits Checker to see if you're eligible.

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