Treatment of a ‘further payment’ – income or capital

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    I am having difficulty in trying to determine whether to treat a particular payment as income or capital.
    To set the scene:
    Identical weekly instalments paid every [b:966b114790]Friday [/b:966b114790]up to and including [b:966b114790]Friday 27/6 [/b:966b114790](all £119.39).
    – On Tuesday 1/7, a “first payment” of £4.18
    – A further payment of £134.51 is paid (Tuesday 1/7 as per helpline)
    – Payments then change to £130.33 (from [b:966b114790]Friday 4/7) [/b:966b114790]
    The question is how do we treat the £134.51 payment?
    It is the first/rounded amount in a series of instalments (INCOME?)
    It is not on the regular instalment day IE Friday (CAPITAL?)
    Pity that we do not have voting buttons on here! Even if you do not specifically know the answer I would be obliged if someone could apply some logic to this scenario.


    Have you looked at the posting ‘arrears of tax credits’ I posted, it was a very similar question. It might help!



    Without seeing the full revised award I’d vote for the capital option for the payments of 1/7/03 (£4.18 & £134.51) as the regular instalment day continues on a Friday.

    As the payments are paid weekly I would treat the change of circumstances as occuring on 4/7/03 the date of the first revised award, as per 1308 of the Tax Credit handbook. (1503 appears to contradict this but I think that it is relating to 4 weekly payments)

    To calculate the new weekly income :-
    1) Work out how much is still to be paid. I.E. the amount of the revised annual award less (total of instalments paid up to and including 27/6 and the payments of 1/7/03)
    2) divide by the number of days between 4/7/03 and 5/4/04 (i.e. 277 days) and multiply by 7

    …….or toss a coin – probably a more reliable method !


    Thank you for your assistance.
    The crux of this concerns the day/date on which regular payments are made.
    1510 aligns with the view that such payments should be treated as capital. I also feel that 1503 concerns 4-weekly payments only and that 1308 is where we should extract the correct information from.
    I only wish that the DWP examples would give some inkling as to how to treat weekly payments; they are all 4-weekly scenarios.
    The only point that I would query concerns the number of days in the remaining period. I would opt for the period 1/7/03 to 5/4/04 i.e. 280 days. I do not see the logic in applying 4/7/03 to 5/4/04. We should only consider the HB/CTB effective date (4/7/03) once we have calculated the necessary weekly income to use in our calculation.


    I completely agree with your comment that we should only consider the HB/CTB effective date once we have calculated the necessary weekly income.

    In this case the change of circumstances for tax credits purposes occurred on Friday 4/7/03 (I.E. the date of the first revised [b:b7e6eaddaa]weekly[/b:b7e6eaddaa] payment) and therefore I would use this date to calculate the remaining number of days in the award period (277).

    For HB/CTB purposes the effective date of the new weekly TC income would then be Monday 7/7/03 – unless I’m missing something. I’m sure someone will let me know!


    Dear DGRIFF
    Yes. You are of course right in terms of the number of days. Somewhere along the line I did not make the transition from 27/6 to 1/7 to 4/7 to 7/7! I ended up assuming that 4/7/03 was a Monday!
    I am pleased that we agree upon the interpretation. What is even more reassuring is that another reputable contributor to this site has also arrived at the same conclusion.

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