There is a distinction between payments that are “in arrears” (e.g. your case) and “of arrears” (in which case the special rules about income/capital apply). You have definitely done the right thing by taking the Tax Credits into account from 7th April 2003. SI2003/308 amended Reg 68 of the HB Regs and Reg 59 of the CTB regs to ensure that “where the change of circumstances…is the commencement of entitlement to working tax credit or a child tax credit…on 6th April 2003…that change of circumstances shall take effect on 7th April 2003”.
