Tax Credit Poser

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  • #19789
    Mark
    Participant

    Claimant A:

    Has WTC award of £5000 made in April 2003 based on annual earnings of £10,000.

    In July 2003 the IR revised the WTC award to £8000 (and therefore increase the ongoing instalments) because they accept that the annual earnings figure they had assumed was incorrect and that it should in fact have been lower.

    Claimant B:

    Also has WTC award of £5000 made in April 2003 based on annual earnings of £10,000.

    In July 2003 the IR revise the WTC award to £8000 (and therefore increase the ongoing instalments) because the claimant notified them that his earnings decreased last week.

    Question:

    In both cases the amounts paid between April and July, and from July onwards are identical.

    Is there any difference in the HB/CTB awards of claimants A and B in how to treat the change in the Tax Credit award in July?

    #1042
    janish
    Participant

    I think ( and please don’t shoot me down in flames if I’m wrong) that IR should calculate arrears for claimant A, of the difference between the two daily rates , from 6/04/03 till the assessment date ( if weekly), therefore the ongoing instalments should be less than for Claimant B, who has a different daily rate from the ch of circs date.

    #1043
    Mark
    Participant

    A few weeks ago I would have said the same thing – but I have now seen a case virtually identical to claimant A where it is not possible to identify any lump sum arrears paid for the April to July period.

    #1044
    Mark
    Participant

    What a shame that no-one other than Janis has yet to come up with an answer. I’ll admit I’m not too suprised by this because I think the question is actually very tough. If it wasn’t already obvious, the question I was really asking is “What are arrears?”. It seems to me that knowing when the provisions of HB Regulation 40(9) (as inserted by SI2002/2402) apply is often fraught with difficulty.

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