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HMRC internal manual

Claimant Compliance Manual

Particular aspects: income: general

Customers have to tell us their income from:

  • social security benefits
  • earnings as an employee whether earned in the UK or abroad
  • income from self-employment

They also have to tell us about other income that is in total more than £300. This includes:

  • income from savings and investments
  • other UK pensions
  • property income
  • trust income
  • foreign income, such as income from investments or property overseas but not income earned aboard as an employee
  • notional income

See Chapter 4 of the Tax Credit Technical Manual for full details of the types of income that must be included and disregarded.

See page TCTM04404 of the Tax Credit Technical Manual for information on how to treat supplementary payments payable in Northern Ireland.

See page TCTM04916 of the Tax Credit Technical Manual for information on how to treat supplementary payments payable in Scotland.

CCRO’s will refer cases to you where the income declared by the customer doesn’t match the information we hold. You should remember that there may be good reasons for this.

For example the customer may have correctly deducted:

  • gift aid payments
  • contributions to an HMRC registered pension scheme
  • £100 a week for Statutory Maternity, Additional Paternity, Shared Parental or Adoption Pay.

You should take particular care where the customer:

  • has earned income outside the UK, see CCM6826
  • asks for their award to be based on their current year estimated income, see CCM6830
  • tells you about income they have not previously reported, see CCM6905
  • is in a joint claim and one of the customers is in prison, see CCM6906

You should also keep in mind deprivation of income. Deprivation occurs if a customer gives up, or transfers to another person, an income which was received, or due to be received, to gain or increase entitlement to tax credits.

For example, a customer may, by a deed of gift, transfer entitlement to an occupational pension to someone else.

Note: The customer may have more than one reason for disposing of the income, only one of which is to obtain tax credit or more tax credit. Securing or increasing entitlement to tax credit may not be a customer’s main motive but it must be a significant one.

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