Tax Credits - late notification of change of circumstances

Tax Credits - late notification of change of...

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A couple in receipt of a joint tax credit award separate, but take longer than three months to notify tax credit office of the separation.

As soon as the problem is identified, tax credit office is notified and each claimant immediately separately files a new claim in their own sole name, to be backdated by three months.

Clearly payments made on account of the joint award subsequent to separation are paid in error and hence overpaid.  That said, for the last three months of the overpayment period there will be individual awards to replace the joint award, and it so happens that the sum total of those two individual awards during the overlapping period exceeds the joint award.  Furthermore, had the change in circumstances been notified at the proper time, then the overall amount of benefit paid would also have exceeded the amount actually paid on account of the joint award during that earlier period of default.

Some long time ago I remember (possibly incorrectly) reading that the government and/or tax credit office recognised the inequity of seeking full repayment of the joint award in these circumstances and I thought that there was an unofficial way of having the overpayment discharged.  I can no longer find the reference to this procedure and as I say my memory may be faulty.

I am not overly bothered about the final three months.  If they have to pay that back and then get the new award paid to compensate then so be it.  A bit of administrative hassle, and claimants have only themselves to blame for the tardiness, but not out of pocket at the end of the day.  COP26 at page 11 seems to say that this is precisely what must happen.  My only real concern is the period prior to the three month backdating of the new claim.

I do not think that the claimants would be able to argue financial hardship, nor could they argue that they had a reasonable excuse for failing to notify of the change of circumstances within one month of the event.

So my question is this: is there any facility (and where is it published) for the remission of the overpaid tax credits in the period from the date of separation up to the point at which the new individual awards commence (or was my memory shot to pieces)?

Thanks

With kind regards

Clint Westwood

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By aiwalters
11th Aug 2011 17:13

see what CPAG says

Unfortunately, there is no provision for "underlying entitlement" for tax credits. But sometimes, if you're lucky, they will write it off in this circumstance.

See CCM15510 onwards (HMRC no longer follow this) and CCM15605-15695

See also: http://www.cpag.org.uk/cro/wrb/wrb211/technical_overpayments.htm

 

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By nogammonsinanundoubledgame
12th Aug 2011 09:04

Thank you

That is very helpful.

With kind regards

Clint Westwood

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