Tax Credit query

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • #22531
    Anonymous
    Guest

    I have a case whereby the award of TC has recently been made back 3 years. Transpires oficial error resulted in awards not being made at correct time. I seem to recall that official error means we can permanently disregard the retro award because of offcial error, i.e. we don’t even include the arrears as capital. Am I delerious or can anyone point me in the right place to find the supporting guidance please?

    paul.radcliffe@derbyshiredales.gov.uk

    #8478
    Anonymous
    Guest

    Answer lies in A18/2005 – Miscellaneous regs consolidated various legislative strands and is clear that we may only disregard any arrears (irrespective of reasons for delay in payment for 52 weeks)

    Let me know if anyone reads this differently
    Paul 💡

    #8479
    Kevin D
    Participant

    Just to clarify…..

    Is it Working Tax Credit and / or Child Tax Credit?

    Or, is it the older “Working Families Tax Credit”?

    If old WFTC, the arrears MUST be taken as income over the perioid it is in respect of.

    If WTC / CTC, then arrears are disreagrded (as income).

    As for capital, the 52 weeks disregard starts from the date the the clmt (or ptnr) receives the arrears.

    Regards

    #8480
    Anonymous
    Guest

    Thanks Kevin – it is the new version of WTC/ CTC and I appreciate the distinction you draw between income and capital.
    Does this eman that after 52 weeks we then include the income as paid at the time?
    What about the balance of any arrears that she then has (The arrears recived as a one off payment are £26k) Do we then look to include anything left over as capital?
    cheers
    Paul

    #8481
    Kevin D
    Participant

    The £26,000 is disregarded as capital for 52 weeks (from the date of receipt). Any balance left at 52 weeks and one day immediately counts as capital.

    Arrears of tax credits are always treated as capital – [b:47c3a2f30d]HBR 46(9)[/b:47c3a2f30d], so no issues arise as to income.

    Regards

    #8482
    Anonymous
    Guest

    This might be one of those cases that subparas (2) and (3) in Schedule 6.9 cover. The conditions are quite stringent:

    – the arrears were paid to correct an official error, and
    – the arrears exceeded £5000 when paid, and
    – the arrears were paid during a current HB award, and
    – the claimant has had unbroken entitlement to HB since then

    If all those conditions are met, then I think the disregard is indefinite. Is that what you were thinking of?

    #8483
    Anonymous
    Guest

    The disregard, as I understand it, Peter, is for the life of that claim, or in the event of the death of the claimant, the life of the partner’s continued claim also.
    But if there is a break in claim, then it becomes capital that will be considered.

    I think….? 😉 8)

    #8484
    Kevin D
    Participant

    Peter – I’d forgotten that aspect. Probably because, so far, I don’t recall any cases with £5,000+ arrears.

    Jon – I think Peter covered it in the last of his bullet points. Or have I misunderstood?

    Regards

Viewing 8 posts - 1 through 8 (of 8 total)
  • You must be logged in to reply to this topic.