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HMRC internal manual

Claimant Compliance Manual

HM Revenue & Customs
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Undisclosed Partners: Recovery of Overpayment for cases opened before 17 May 2007 - Claim Incorrectly Made By A Couple

You may sometimes come across cases where a claim has been made by a couple when, in fact, they should have made two separate claims. For these cases the gross overpayment will be the amount of tax credits paid from the date of the claim or the date they ceased being a couple. The notional entitlement will then be the amount they would each have been entitled to claim had they claimed as single customers.

To arrive at the net overpayment you should deduct both amounts of notional entitlement from the gross overpayment. How you then allocate the net balance between the parties will depend on their wishes. If they specifically ask for it to be split in a particular way you should go along with their proposal as long as they are both in agreement to this. If they do not stipulate how this should be split or cannot agree the split, you should divide the notional overpayment equally between them. You should then apportion any penalty in the same manner.

Where the notional entitlement exceeds the gross overpayment you should restrict it to the amount of the overpayment. For example, the amount of tax credits paid to the couple is £1,376 but they should not have made the claim as a couple. Had they correctly claimed as individuals they would have been entitled to £2,478 in total. The notional entitlement should be restricted to £1,376 so that the net overpayment is £0.00.