Arrears of Tax Credits

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    According to recent press reports, arrears of NTC are now to be paid weekly with the normal payment of NTC. Is this just paper talk? If not, anybody got ideas how these arrears can be identified? Will it be a simple entry on the award letter?


    I raised this point in a previous thread and am aware that it has been raised direct with Paul Howarth. No answer has been forthcoming. The problems with it are pretty obvious – not least that the (now thoroughly discredited) Tax Credits manual will be due a fairly hefty amendment.


    This issue was raised with Gail Knowles at yesterdays Unitary Benefit Managers meeting. Apparently arrears are being paid in installemnts. However, the award letter should say how much of the payment is arrears.

    To calculate take
    annual award,
    minus total arrears,
    divide this by the number days between assessment date and end date of award, then multiply by 7 for weekly amount.

    Gail also stressed the importance of taking the annual award and not worrying about how the installments that are paid.


    I’m not sure this will make an awful lot of difference to the way we calc the awards.

    Presumably the arrears [b:3949f03eb1]amount[/b:3949f03eb1] is still determined in the same way and we’ll still end up treating it as capital at the beginning of the award.

    The fact that it is paid in installments won’t make any diff. These are just payment arrangements between the IR and the customer. We’ve been here before with other aspects of TC installments.

    The calculation method in the message above is completely standard. Let’s not get sucked into another debate about how the IR actually pay the TCs. Nobody gains and we all just end up confusing the heck out of each other.

    Let’s stick to what we know. Dates. Amounts. Periods. Arithmetic.

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