This is a copy of notes I have just issued to my staff. I waive my right to royalties 🙂
This is the tax credit position:
1. A tax credit award is made for a fixed period (most usually up to 31 March of the following year)
2. At the end of that period the award does not stop. The customer is sent a “review form”
3. When the award is finally reviewed (process starts after the end of the financial year) it may be retrospectively increased or decreased
4. Any adjustment to tax credits is made from future awards
5. If customer no longer entitled to tax credits they are billed for outstanding overpayments
This is the HB position:
1. HB uses the amount of tax credit the customer is getting now
2. It follows that you can’t retrospectively adjust a tax credit award, because the customer wasn’t getting the revised amount at the time
3. It also follows that you don’t put an end date in tax credit income unless the award stops. You can’t predict this in advance
ATLAS is not handling this correctly. As the reprofiling awards are coming through the new amount is being inserted from last April, despite the fact there is an existing income. Please make sure that tax credit income is amended only from the date of change of the actual payment (the information should be there)
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