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HMRC internal manual

Claimant Compliance Manual

Closing the enquiry: interaction with state benefits

A customer may be obtaining DWP (or in Northern Ireland the Department for Communities) benefits or housing benefit or may have been refused them because of the amount of tax credits payable. If you adjust the amount of tax credits this might affect the amount of DWP or housing benefit to which they are entitled. This must not influence your decision to revise the award.

Some benefits can be claimed retrospectively but some cannot. Again this should not influence your revised award even if it means that you are reclaiming tax credit overpaid but the customer cannot retrospectively claim benefits.

Where benefits can be claimed retrospectively there is no provision to set off the overpaid credits from the underpaid benefit. It might be that on the one hand we are asking for £900 overpaid credits to be refunded and on the other hand the customer is receiving arrears of a benefit/allowance. Even if the customer asks you to make a set off this cannot be done as there are no statutory powers to support it.