Tax Credits

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  • #19724
    Anonymous
    Guest

    Sorry, but again this refers to the ongoing saga that is Tax Credits!

    I am interested in finding out what other people have done/plan to do with all WFTC/DPTC income types. We have not, as yet, ended these income types and have run Council Tax billing taking these income types into account (partly because of software problems). We are producing annual award letters for Housing Benefit next week and need to take the decision on whether to end these income types and create potential overpayments, new bills, decision notices etc. etc. I know the guidance says we do not have a choice and must end them but the logical thing to do woudl be to leave them on until the IR are upto date!

    What has everyone else done/plan to do?

    #817
    Anonymous
    Guest

    Much as we would have liked to leave the current entitlements in place we have reluctantly removed all WFTC & DPTC in-line with the guidance.

    We also intend to write to all previous WFTC/DPTC claimants whose proformas came back indicating no new tax credit claim had been made.

    #818
    Mark
    Participant

    There is a simple answer to this – end them now! It is unlawful to take WFTC/DPTC into account after they no longer exist. It is also unlawful use notional WTC/CTC. Overpayment concerns are valid (although not all cases will end up with them) but are also irrelevant to your decision.

    #819
    Laura Moore
    Participant

    As the IR is behind on processing the NTC claims, I was expecting them to invoke their contingency arrangement. This is detailed in Section 12 of the NTC Guide, and allows Local Authorities to treat existing WFTC/DPTC payments as provisional awards of NTC. Our software provider (Anite) has a programme to put an ammendment code on cases where NTC has been claimed but not yet awarded. In these cases the WFTC/DPTC is not deleted but converted to an NTC income code from 7/4/03.We were planning to run this job as close to 7/4/03 as possible, to wait and see if the contingency arrangements will apply. I understood from the speakers at the IRRV conference that this would be a standard practice if all the NTC claims were not processed in time. From the other replies, I’m not so sure now!

    #820
    chris harvey
    Participant

    I agree with Mark. Its very risky hoping IR invoke the contingency plans. We use the same software as Laura and have removed WFTC/DPTC from our claims. Imagine some scenarios if we don’t – we leave it in and they don’t claim NTC on time, its eventually paid as arrears (remember 3 months automatic backdating) which is capital so we have to take it out anyway. The message is clear from the DWP – it should not be counted and we have no legal basis to do otherwise.

    #821
    peterdelamothe
    Keymaster

    First of all it is maladministration to use income from a scheme which has now been abolished. Secondly, it is likely to result in a lot of extra work for the LA. It is now clear that the IR is not going to assess all the claims by the beginning of April. Thus many of the awards will contain payments of arrears as well as being in arrears. These will have to be seperated and the “of arrears” ignored as capital. It is not simply going to be a matter of just putting in the new income and taking out the old figures from 7 April in the HB reassessment. This will be very messy indeed where an LA has used notional amounts and will require multiple reassessments but for the rest of us we will only need to recalculate from the first payment date. In this instance, the right way will prove to be the best way.

    #822
    Laura Moore
    Participant

    It really was not my intention to maladminster the HB scheme – I acted on the information I had, it now seems that I have interpreted it incorrectly. As a member of the DWP/IR/LA Working Group, do you know if there is any likelihood of the contingency arrangement being invoked?

    Thank you.

    #823
    Anonymous
    Guest

    I agree with Laura. As WFTC and DPTC are still in force until 7th April 2003 we were also waiting to here if the IR would bring in contigency arrangements as mentioned in the guidance from DWP. We felt by waiting until now it would cause less confusion to claimants then ending all the inome types then essentially putting them all back on again before we hit the 7th April.

    #824
    peterdelamothe
    Keymaster

    I think the point is that because the IR now admit to being well behind schedule, many tax credit claimants will be entitled to receive much more HB / CTB than they would have received if the new scheme had run smoothly. Good luck to them is my view. It is not the claimant’s fault and I would also point out that with the increased taxation due in April (NINO increases and the end of the child tax code reduction) wage packets are going to be rather light next month. But this should be balanced by higher levels of HB / CTB except … where the LA has wrongly used “notional” amounts. I cannot personally see how claimants are going to be “confused” except if they see they are getting less money in their hand than their work colleague who lives in a neighbouring local authority area. But that is just a personal opinion.

    The official line is that no contingency rules have or will be applied. I suspect that politically this is not seen as a good idea, particularly at the moment.

    #825
    Anonymous
    Guest

    Thanks Peter.

    I will now make arrangements for all WFTC and DPTC to be removed from claims.

    The “confusion” I was referring to is where claimants are sent their CTax bills with low monthly instalments and then receive a further bill with much higher instalments and less time to pay it over. I am sure our customers woudl have been askin why we had removed income they were receiving for their annual bills only to put it back on again at a later date. I cannot see this being as big an issue now that no contigency arrangements are being made.

    #826
    peterdelamothe
    Keymaster

    Jenni, you are not wrong on the point about amounts left to pay. Many customers in this borough will have been told they have nothing to pay in rent / CTAX from April when in fact they do not even qualify. The problem is that the income date has moved. If the IR had been up to date and ahead of target (as they said), then none of this problem would have occurred. However, like many other LA’s, Camden has received info on just 5% of the proforma forms we sent out. It may be some time (weeks or months?) before the IR manage to deal with the rest. Although the claimant will eventually get the backdated payment to 6 April, this will not count as income until the actual payment date for our purposes. So, yes, many HB customers will get a rent / CTX “holiday” for the first few weeks of the scheme. There is always a silver lining for someone! Incidentally, I wonder about the impact on exemptions from April on the Supported People pot, particularly for claimants living in temporary accommodation.

    #827
    Laura Moore
    Participant

    Sorry to go back to this subject, but will there be any further information from the Inland Revenue/DWP before April 7th on whether the contingency will be invoked? Is there another amendment of the NTC Guide due before then?
    If all WFTC/DPTC payments will stop on April 6th, and we remove those incomes off our claims, that is fine. But if there is any new decision at the last minute, we will have to re-load information which would be a time consuming exercise. Like probably every other authority, we are waiting for replies from the IR on 75% of our NTC claims.
    It would be very helpful if the IR/DWP/LA working party could put some information on the website or this forum, as the only LA Helpline number I’ve been given for the IR opens on 1st April! (0845 300 3944). This will probably be constantly engaged! I just want a clear understanding of what is going to be happening.

    #828
    peterdelamothe
    Keymaster

    Laura, the next meeting with DWP and IR is next Thursday. I will be able to tell LA colleagues more about the latest state of play then.

    My current understanding is that the full helpline service will not be available until 7th April.

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