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HMRC internal manual

Claimant Compliance Manual

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HM Revenue & Customs
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Closing the Examination - In-Year Recoveries - Examples

Example 1

Mr and Mrs Brown have earnings of £6,800 and claim WTC and CTC for 2010/2011. They are awarded £3,001.20 WTC and £1,990 CTC making a weekly award for the household of £95.98. An examination established they had no qualifying child for the period of claim and by the time a revised decision notice is issued they have received 10 weeks of CTC. The CTC overpayment is £382.70.

In strictness this is recoverable in-year but, because there is entitlement to WTC, the NTC system will automatically try to set off the overpayment against the remaining WTC payable for 2010/2011. The remaining 42 weeks of WTC total £2,424.24 so the system will automatically set off the overpayment of £382.70 and pay out £2,041.54 over the rest of the year.

There will be no overpayment to recover in-year.

Example 2

Mr and Mrs Green have earnings of £17,000 and claim WTC and CTC for 2010/2011. They are awarded £0.00 WTC and £1,217.20 CTC making a weekly award for the household of £23.41. An examination established they had no qualifying child for the period of claim and by the time a revised decision notice is issued they have received 20 weeks of CTC. The CTC overpayment is £468.20. Because there is an entitlement to WTC (even though it is set at £0.00) the NTC system will automatically try to set off the overpayment against the remaining WTC payable for 2010/2011. When there is nothing to set it against it will leave the overpayment to be picked up again at the year end.

Action will be needed to recover the £468.20.

Example 3

Mr and Mrs White have earnings of £11,000 and claim WTC and CTC for 2010/2011 and are awarded WTC of £1,447.20 and CTC of £1,990 making a weekly award for the household of £66.10. An examination established they had no qualifying child for the period of claim and by the time a revised decision notice is issued they have received 40 weeks of CTC. The CTC overpayment is £1,530.80.

In strictness this is recoverable in-year but, because there is entitlement to WTC, the NTC system will automatically try to set off the overpayment against the remaining WTC payable for 2004/2005. There are 12 weeks remaining which total £333.96 WTC payable so the overpayment will first be set against this making the remaining payments nil for 2010/2011. There will be a further £1,196.84 to be recovered and the NTC system will leave this overpayment to be picked up at the year end.

Action will be needed to recover the £1,196.84.