Reply To: Date a Tax Credit CIC takes effect on HB claim


I look at it this way:

You should assess Tax Credits based on the award notices you receive.
Up until the revised notice in Dec you were correctly treating the CTC as income. In fact the CTC income WAS paid to the customer during that time so no problem there.

I’d say you should only revise the CTC income from the Monday after the new (Dec) award notice was dated.

The overpayment matter is really between the Inland Revenue and the customer. They will recover it from ongoing Tax Credits. If they have already done this, then the award notice for Dec will show an amount as “already paid” on page 3 of the notice.

Award: £1500
Already Paid: £1000
To pay: £500

The amount shown as “To Pay” (or whatever) should be used as the income for the period starting from the award-notice-date to end-of-tax-year.

e.g. £500 for period 18th Dec 2003 to 5th April 2004
Period = 110 days
weekly income 31.82

If the overpayment is so large that it wipes the income out then that means CTC gets reduced to £Zero as a source of income for HB.

Award: £1500
Already Paid: £1500
To pay: £0


Award: £1500
Already Paid: £2000
To pay: -£500

If the overpayment leaves a debt, then this is recovered by the Inland Rev from next year’s Tax Credits award. Again you just use the net amounts notified to you on the subsequent year’s award notice.

Hope this helps.

Peter Cox