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HMRC internal manual

Claimant Compliance Manual

Undisclosed Partners: Recovery of Overpayments from 18 January 2010 - Failure to notify a change in a previous year but there is no penalty

Where you learn that the customer failed to notify that a partner had joined or left their household in a previous year which has already been finalised you can consider remitting part of the overpayment where

  • A new correct claim has now been made and the award made and 
  • The start date for the original award is prior to the date for which the new claim is backdated

Although the customer not only failed to tell us about the change at the time and then went on to incorrectly finalise their award we still want to encourage customers to put their affairs on a correct footing.

Where you have decided not to charge a penalty you need to follow the steps below.

Step 1

  • Advise the customer of the date from which the award will be terminated and that any tax credits paid since that date will be overpaid
  • Explain that they should now make a new claim in the correct capacity and advise them that if they do so you might be able to waive part of the overpayment
  • Issue your closure letter, amend the award and BF your cases for 30 days

Step 2

During the BF period you should check to see if the new claim has been made and processed.

  • If the new claim is not made within this period you can close and settle your case but if the customer then gets in touch to say they have now got their new award see the following bullet point
  • If the new claim is held and an award has been made see step 3

Step 3

  • Use the SEES calculator to calculate the notional entitlement, see CCM15720 and then remit the appropriate amount of the overpayment using Make Remission - class 11. The balance of the overpayment will be repayable

Note: Any amounts remitted under Notional Entitlement should be recorded in a separate establishment file

There are examples of a notional entitlement calculation at CCM15795