Tax credit update from 5th April – what you need to know

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    I am doing some training this week on the April 2004 changes and I have a slide for Tax Credit. You know, the changes from next Monday.

    Er, except that the Revenue has said nothing, published nothing, told nothing. No Circular has appeared (even draft) although I understand something will appear in the benefits newsletter on Wednesday. Will they be uprating, issuing payments on acount, emergency payments? What will their policy be on recovery of overpayments? Will LA’s be told at midnight on the 5th? Probably. Not as if we had anything else to do?

    Watch this space for more exciting developments.

    see also [url][/url]


    We must all use our crystal balls, tea leaves, rune stones etc to predict the future or rely on rumours and newspaper reports. I am currently concentrating on a winner for the Grand National as I have a greater chance of success! any tips?


    Try “Housing Benefit simplification” for the national. Putting up overweight and ALWAYS wears blinkers.

    Recent form is “PU,F,JJO,TTWC”. Thats: pulled up, fell, jockey jumped off, took the wrong course. Again.


    At least if it was a horse we could shoot it!

    (apologies to horse-lovers out there)


    I note in the post of 29/03/04 that a benefit newsletter was due today. However, the only thing I have received is A18, which incidentally was no use whatsoever in helping me decide what to do with tax credit recipients from April. The latest info I have managed to get from IR is the instalments from April will be last annual award figure divided by 52.

    Has anyone received any further info?


    Just received the latest edition of HB Direct.

    Peter stated in his earlier post [i:44253a8153]the IR have said nothing, published nothing, told nothing. [/i:44253a8153]

    You’ll be pleased to know that our guidance is to [i:44253a8153]do nothing [/i:44253a8153] (at least until the new award notice is issued) unless the customer asks you to.

    There does seem to be an element of consistency if nothing else.

    Further guidance is to follow as to how the new award is to be treated.

    Julian Hobson

    lets hope that guidance arives before the CD that we will get from HBMS regarding TC reveiws.

    I don’t know how many customers are out there who have had an in year reconciliation (clawed back in year overpayment) but as you know we will have used the reduced weekly TC (ie after the op is deducted) when calculating HB (simplified eg below).

    eg 01/04/03 to 31/12/03 paid 39 weeks at £100.00 per week = £3900 but should have had 26 at £100 and 13 at £75.00 so had 13 x £25.00 too much. This is knocked off the 01/01/04 to 31/03/04 payments so for this period paid 13 x £50.00 and that is what we have in the HB claim.

    01/04/04 OP is clawed back so payment reverts to £75.00 per week but we don’t know and are not told.

    In the summer of 2004 the TC claim is “reviewed” and IR find that it should be £40.00 per week from 01/04/04.

    IR decide not to recover the OP of £35.00 per week but we are still none the wiser that customer has been receiving £25.00 a week more than we had in the claim. We are told that TC is now reduced to £40.00 from £75.00 but that we only input that from the later date, presumably we must still correct our previously eroneus award but what do we correct it to (I don’t know that there is an answer)?

    I’m sure thee will be lots of other Intricacies

    Julian Hobson

    Just seen A20/04 and the above is covered (para 18) the circular says do nothing unless the customer tells us about the change of circs, thats alright then! what do we do when we find out at renewal stage, and we will ? Given that income for the remainder of 2004/5 will be worked out by referrence to that already received in the first part of 2004/5 will we be expected to make sure that the weekly figure already received (prior to the renewal) matches that that we held from April (and if not why not given the “need” to get a correct assessment) or will we be expected to turn a blind eye?


    Oh, and they just chucked in the casual reference to the Miscellaneous Amendment Regs. Wot they? Found it by scrolling through the list of SIs on HMSO. How can anyone stay on top of the game these days?


    Also, bit puzzled by the following taken from April’s HB Direct:

    “Throughout the renewals period….IR will continue to pay tax credits at 2003/4 rates until the customer completes and returns their Annual Declaration. (So far so good 🙂 ). These provisional payments will, for most customers, be different from their current award but the customer will not be sent a notifiaction of this change. ❓ Although you will, of course, need to re-assess HB/CTB when the renewal award is issued and new award notice issued, you will not need to take any action in respect of the provisional payment [i:2e16e537af]unless the customer asks you to[/i:2e16e537af] (That what confuses me :?)


    Me too; a little confused I mean.
    Re; Provisional payments, which I think is everyone until their “Annual Declaration” is returned. We have a lot of cases where Tc has been overpaid hasn’t everyone? A20 implies maybe accidentally that this change need not be notified “take no action”.
    If we were to visit or talk to a claimant whom we know to be in receipt of Tax Credit should we not ask about this stream of income?
    What if it comes up in conversation accidentally?
    Vf visits require that all income be checked, how unfortunate to be asked about an increase which is not notifiable.
    How do people know that they need not report this change? Everything we send out says “you are required to declare any changes in circumstances, examples include income etc”.
    How will La’s be notified by claimants of a change with no notification to show it?
    I like the “take no action” approach, what action were we supposed to take? No notional Tcs, no notes of people who were overpaid Tc and will now be in payment again equals take no action anyway! I wonder if these will show as a “high risk” intervention?
    I know, from memory, we have a number of cases whose recovery rate meant they got no Tc for the last few weeks/months of 03/04, it seems we should have/should be writing to them although this is hardly “take no action”! For once it seems to me it is better that La’s are not informed of the change until their actual award proper is sorted, then, I think I’ll know where I am, although this will of course be months in the future!

    Can a Wib be claimed due to our efforts in discovering this non-notifiable income change?


    A colleague has pointed out that this suggests:

    ‘In February 2004, IR sent out a letter to all tax credit customers.The key messages in the letter were that IR
    – will continue to pay tax credits beyond 5 April 2004 on
    a provisional basis, at the same rate as the 2003/4

    Yet further on in the same article it states:-

    ‘These ‘provisional payments’ will, for most customers, be different from their current award but the customer will not be sent a notification of this change’

    So the same rate of award which is also different from the current award.

    So that’s clear then.

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