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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
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Changes - miscellaneous (G-Z): Income changes

Checklist

Before you follow this guidance make sure

  • you follow the guidance in TCM0138020 
  • you have the correct user roles to follow this guidance. Use the B&C Roles and Access Catalogue. You can find this by going to the Benefits & Credits homepage, selecting ‘R’ on the B&C A-Z index, selecting ‘Roles and Access Process’, selecting ‘Roles & Access Catalogue’ from the Related links menu
  • you are in the correct MU. Use TCM0322460.

Guidance

Note: when sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian / Data Security Team for advice.

Step 1

Check and make a note of any unprocessed change of circumstances on the Unprocessed Change of Circumstances work list. For how to do this, use TCM1000142 

  • for all the changes you have been notified of and/or found on the Unprocessed Change of Circumstances work list, check that you can make the change. Follow the guidance in TCM0042260.

If the changes can be made, go to .

If you are dealing with a reply your TALLO about a salary sacrifice scheme, go to .

If you are dealing with an expired BF date, go to .

Step 2

If the customer has told you they have joined a salary sacrifice scheme, go to .

If the customer has not told you they have joined a salary sacrifice scheme, go to .

Step 3

Check if the salary sacrifice scheme is for any of the following

  • childcare vouchers or a nursery place paid for by the employer
  • pension provision
  • medical insurance/ life assurance or critical illness cover
  • dental cover
  • additional holiday entitlement
  • cycle to work scheme (the provision of a cycle and safety equipment)
  • a bus pass for public bus travel
  • a car parking pass for parking at or near their place of work
  • a single mobile phone with no transfer of property in the phone.

If the salary sacrifice scheme is one of the above, go to .

If the salary sacrifice scheme is not one of the above, go to .

If you do not have enough information to decide whether the salary sacrifice scheme is one of the above, go to .

Step 4

Check if the customer has provided all the information you need for their salary sacrifice scheme. You will need the following

  • the employment contract variation for the customer who has joined the scheme

Note: If there is more than one scheme, you will need the contract variation for each scheme.

  • two payslips, one before and one after the variation
  • all other documents relevant to each scheme, for example any booklets or leaflets given to the customer as a guide
  • P11D or the cash equivalent of the benefit

Note: The P11D is only issued after the end of the relevant tax year; therefore the customer may not have their P11D if for example they have just started a salary sacrifice scheme in the CY. Where the customer does not have their P11D, ask them to request the estimated cash equivalent from their employer (the figure that would be on the P11D) along with an estimate of their income after the deduction of their salary sacrifice for the CY.

If you have all the information you need, go to .

If you do not have all the information you need, go to .

Step 5

Access the tax credits computer to check the previous years (PY) income details to make sure you have information on all the types of income the customer is in receipt of. For how to do this, use TCM1000060.

If income details have been provided for all of the income types populated in the previous year, go to .

If income details have not been provided for all of the income types populated in the previous year

  • make a note of which income types are missing
  • go to .

Step 6

Check whether the customer has stated that their new income details are for the whole of the tax year.

Note: If you are dealing with any other changes make sure you have all the information you need to apply the other changes as well. Follow the relevant Changes guidance.

If the new income details are for the whole of the tax year and you have all the information you need to apply the changes, go to .

Note: If you are dealing with a change in the Universal Year (UY) (the year in which the customer has claimed Universal Credit (UC) you will only require the income details from the start of the current award to the day before UC was claimed.

If the new income details are for the whole of the tax year but you do not have all the information you need to apply the changes, go to .

If you are unsure whether the new income details are for the whole of the tax year, go to .

If the new income details are not for the whole of the tax year, go to .

Step 7

Check if the change relates to Current Year (CY), Previous Year (PY), Universal Year (UY) or Pre-award.

Note: The UY relates to the year where the customer has claimed Universal Credit and will be subject to In Year Finalisation (IYF). For further information go to TCM0346200.

If the income change relates to CY, go to .

If the income change relates to PY, go to .

If the income change relates to UY, go to .

If the income change relates to Pre-award, go to .

Step 8

Contact the customer by telephone for all the missing information you need. Follow the guidance in TCM0094080.

Note: If you are dealing with any other changes make sure you ask for the missing information for all the other changes as well.

If you are able to contact the customer by phone, go to .

If you are unable to contact the customer by phone or you are unable to obtain their phone number, go to .

Step 9

Write to the customer for all the missing information you need

Note: If you are dealing with any other changes make sure you ask for the missing information for all the other changes as well.

Step 10

Write to the customer asking them to send the supporting documentation you need for their salary sacrifice scheme

Note: If you are dealing with any other changes make sure you ask for the missing information for all the other changes as well.

  • set a BF date of 30 days
  • go to .

Step 11

If you are dealing with a pre-award claim

  • update Application Notes with the message NC83 from TCM0164020. For how to do this use, TCM1000028 
  • take no further action.

If you are dealing with a post award claim

  • update Household Notes with the message NC83 from TCM0164020. For how to do this, use TCM1000001 
  • take no further action.

Step 12

Ask the customer for the following information about the income change

  • the income for each customer in a joint claim
  • the income for each PY field that was populated
  • confirmation that the new income figures provided are for the whole of the tax year

Note: If the customer asks you how they work out their current year income, follow the guidance in TCM0116000.

Note: If the customer’s CY income has increased by £5,000 or less compared to their PY income, this will not affect their CY payments. The reported increase must still be applied on the tax credits computer as it could have an affect on their provisional payments for the next year. If this does apply, remind the customer that even though the increase will not affect their current award they should check any subsequent award notices as their payments for the following year may be affected.

If the customer is able to provide all the required information, go to .

If the customer is unable to provide all the required information

  • advise the customer that you are unable to apply any changes unless all the required information is provided
  • ask them to contact us again once they are able to provide all the required information
  • set an action date of 30 days in the future. For how to do this, use TCM1000008 
  • take no further action.

Step 13

Send all the information about the customer’s salary sacrifice scheme to your TALLO, who will tell you what to do with the case.

  • set a BF date of four weeks in the future
  • take no further action.

Step 14

Income change relates to CY

  • apply any other changes required. Follow the appropriate Changes guidance
  • update the CY income details. For how to do this, use TCM1000201 
  • update Household Notes with the message NC29 from TCM0164020. For how to do this, use TCM1000001 
  • go to .

Step 15

Income change relates to PY

  • apply any other changes required. Follow the appropriate Changes guidance
  • update the PY income details. For how to do this, use TCM1000202.

If a warning message displayed and you had to pass the case to a Level 2 User or your manager, take no further action.

If a warning message displayed and you were able to make the change

  • update Household Notes with the message NC28 from TCM1064020. For how to do this, use TCM1000001
  • go to .

Step 16

Income change relates to UY

  • apply any other changes required. Follow the appropriate Changes guidance
  • update the CY income details. For how to do this, use TCM1000201 
  • Update Household Notes with the message TE05 from TCM0174020. For how to do this, use TCM1000001
  • Go to .

Step 17

Complete the ‘Free Format’ screen by entering the following

  • ‘Income change recorded DD/MM/YYYY’
  • ‘Clmt 1/Clmt 2 (delete as appropriate) CY income for (insert type of income)= £xx.xx’

    For how to do this, use TCM1000036.

Note: If the customer has more than one type of income you must enter details for each type of income in the ‘Free Format’ screen. Do not enter a total amount.

Note: When the ‘Free Format’ screen has been completed and the claim has been processed, an entry will be created on the Unprocessed Change of Circumstances work list.

  • update Application notes with the message NF01 from TCM0164020. For how to do this, use TCM1000028 
  • take no further action.

Step 18

Send any correspondence to storage. Follow the guidance in TCM0074140 

  • take no further action.

Step 19

Phone the customer for all the missing information you need. Follow the guidance in TCM0094080.

Note: If you are dealing with any other changes make sure you ask for the missing information for all the other changes as well.

If you are able to contact the customer by phone

  • ask them what their salary sacrifice scheme is for
  • ask them for any evidence or documents that you need
  • go back to .

If you are unable to contact the customer by phone

  • write to the customer asking them what their salary sacrifice scheme is for and to send any supporting evidence or documentation you need

Note: If you are dealing with any other changes make sure you ask for the missing information for all the other changes as well.

  • set a BF date of 30 days
  • take no further action.

Step 20

If the BF date has expired and the customer has replied to your enquiry, go to .

If the BF date has expired and the customer has not replied to your enquiry, go to .

Step 21

If the reply to your enquiry relates to a salary sacrifice scheme, go to .

If the reply to your enquiry does not relate to a salary sacrifice scheme, go to .

Step 22

If you are dealing with a post award claim

  • update Household Notes with the message NC85 from TCM0164020. For how to do this, use TCM1000001 
  • go to .

If you are dealing with a pre award claim

  • update Application motes with the message NC85 from TCM0164020. For how to do this, use TCM1000028.
  • go to .