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HMRC internal manual

Claimant Compliance Manual

From
HM Revenue & Customs
Updated
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Particular Aspects: Work & Hours - Self-employed Customers - System Interrogation/Third Parties

A particular pattern has been observed in a number of claims where Customer A is cleaning for Customer B, Customer B is cleaning for Customer C, then Customer C would clean for Customer A. Where this happens you must consider whether on the balance of probability what is being claimed make sense.

It is credible that Customer B, who is claiming tax credits would be able to afford to pay the amount stated by Customer A?

If each customer is just cleaning for 1 person how would they meet the 16 hours criteria?

If all the customers are from the same address would the premises be big enough for all the people to be working 16 or 30 hours to clean it.

Although the tax credit act allows us third party powers to contact employers, a person for whom a self employed person provides a service, is not an employer. We can not approach a person or company named on an invoice, or diary and so on, without first obtaining written consent from the customer on a completed TC1068 (declaration) Authorisation form. A separate declaration for each client must be completed by our customer. We can send the declarations either with the initial opening letter or later on in the intervention with the TC1068 Authorisation form. See also the guidance in CCM3025 and CCM3026 

Whilst we can approach the customer’s clients to confirm work done if we have the written permission from the customer, you must not look into the tax affairs or claims of these clients as this is a serious breach of the Data Protection Act. If you need to verify the existence or authenticity of the clients you can use information that is already in the public domain such as Experian or Google Earth on the internet. We can verify whether a company exists through HMRC systems or companies house. If we can not find any company details then we can on balance of probability believe the information given is incorrect, see CCM6800 

If the customer names a client and that client is also claiming tax credits, we can still not approach them for information without permission. Neither can we let either customer or client know, that the other is claiming tax credits.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)