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HMRC internal manual

Claimant Compliance Manual

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HM Revenue & Customs
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Undisclosed Partners: Recovery of Overpayments from 18 January 2010 - Claim is incorrect from the outset - Examples without a penalty

Example 1

Mia was awarded tax credits as a single mother from 21 June 2009. On 1 February 2010 Mia admits that her claim was incorrect as she had been living with Nico since the spring of 2009. Mia explains that she did not include Nico on her claim because he still married to Chrissey. Prior to making the claim Mia had rung the helpline to ask for our definition of a couple. She was told that it is Living Together as Husband and Wife so did not include Nico as she thought they couldn’t be living together in that capacity as he is already married.

Mia accepts she made an incorrect claim but you decided not to charge a penalty. Mia’s overpayment for 21 June 2009 to 1 February 2010 is £4,719.

Mia and Nico have made a new claim which is backdated to 7 November 2009 so you need to calculate notional entitlement for 21 June 2009 to 6 November 2009. Had they made a correct joint claim they would have received £2,130.

The notional entitlement for 2009/2010 is £2,130 so you will remit that amount and we will recover £2,589 from Mia.

Example 2

Elle was awarded tax credits as a single mother from 27 June 2008. On 1 February 2010 Ellie admits that her claim was incorrect as she had been living with Mike on and off since the spring of 2008. Ellie did not include Mike on the claim because of the volatile nature of the relationship and the fact that Mike has never given her any financial support. In addition, ever since the baby was born in June 2008 she has suffered post natal depression and has provided a doctors note to confirm this. The doctor has advised that as a result of this she has not been capable of dealing with day to day matters.

Ellie accepts she has made an incorrect claim but you decide not to charge a penalty. Ellie and Mike make a new claim for 2009/2010 and this is backdated to 5 November 2009. Ellie has two overpayments as follows

2008/2009 (27 June 2008 to 5 April 2009) £5,900

2009/2010 (6 April 2009 to 1 February 2010) £6,350

Ellie and Mike have made a new claim so you need to calculate notional entitlement for two periods. Had they made correct claims they would have received

2008/2009 (27 June 2008 to 5 April 2009) £2,100

2009/2010 (6 April 2009 to 4 November 2009) £1,850

The notional entitlement for 2008/2009 is £2,100 and for 2009/2010 it is £1,850. We will recover £3,800 for 2008/2009 and £4,500 for 2009/2010 from Ellie.