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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
, see all updates

Changes - work (general A-M): Employment started (AG)

Where a customer notifies you they have started a new employment, consider steps 1 to 16.

Step 1

Note: If the claim you’re working is pre-award then you don’t need to look for an unprocessed change of circumstance work item as these will only be shown on post award claims.

Before making any changes, use Function VIEW LINKED WORK ITEMS to check if there are any Unprocessed Change of Circumstances work list items shown

  • If there are no Unprocessed Change of Circumstances work list items shown

    • check if the change can be made. Follow the guidance in TCM0042260

    then, if the changes can be made

    • go to .
  • If there is an Unprocessed Change of Circumstances work list item shown

Note: If the Unprocessed Change of Circumstances work list item is the same as the change you have been notified of, delete the work list item and carry on following this guidance for the change you have been notified of.

* make a note of the change you have been notified of
* follow the guidance in TCM0054060 at step 1 for the change you have been notified of and the ones on the Unprocessed Change of Circumstances work list

then, if you can action the changes

* follow the rest of the guidance in TCM0054060 for the work list item only
* return to this guidance to action the change you have been notified of

Note: If you need to contact the customer for any missing information, make a note of all the information you need for all the changes.

* go to .

Step 2

Note: From 6 April 2012, couples with children will be entitled to working tax credit if they are both aged 16 or over and

  • they work at least 24 hours a week between them, with one person working at least 16 hours a week. If only one person works, that person must be working at least 24 hours a week, or
  • one person works at least 16 hours a week and the other person can’t work because they are

    • incapacitated (in receipt of certain benefits because of a disability or ill health), or
    • an inpatient in hospital, or
    • in prison either on remand or serving a custodial sentence, or
  • one person works at least 16 hours a week and that person qualifies for the disability element of Working Tax Credit, or
  • one person works at least 16 hours a week and that person is aged 60 or over.

Check the information provided to determine if you have all the following details

  • customer’s name
  • customer’s NINO
  • start date of the new employment
  • place of work, for example UK
  • total number of paid jobs
  • total number of paid hours
  • employer’s reference number
  • payroll number, if available
  • employer’s name
  • employer’s address

and, if the new job is a self-employed job, the Unique Taxpayer’s Reference (UTR) number

then

  • check the information provided to determine if the customer or their partner qualify for the disability element of WTC. The disability element is payable if the claimant, or at least one of the claimants in a joint claim

    • is engaged in qualifying remunerative work for at least 16 hours a week, and
    • has a physical or mental disability which puts him at a disadvantage in getting a job and
    • satisfies the qualifying benefit test
  • check the information provided to determine if the customer has been in receipt of IS, JSA, ESA or PC. If they have, check whether the following information has been provided

    • type of benefit, if applicable
    • start date of the benefit, if applicable
    • end date of the benefit, if applicable

    Note: Start or end dates for ESA claims can’t be earlier than 27/10/2008.

    Note: From 1 May 2012 the period for which people can receive contribution-based ESA will be limited to 12 months.

    • PY income, if applicable

    • If all the details have been provided, go to .
    • If all the details have not been provided, go to .

Step 3

Phone the customer to obtain the missing information. Follow the guidance in TCM0094080.

  • If you still don’t receive a reply from the customer after following the normal reminder cycle, go to .

Note: If the only information you can’t obtain from the customer is the actual date they started work then you must use the date the customer informed HMRC of the change as the work start date.

  • If you contacted the customer and obtained the missing information, go to .
  • If you contacted the customer and obtained all the missing information apart from the PY income

    • use Function MAINTAIN HOUSEHOLD NOTES to enter the following

    ‘PY income details have not been received all other employment details obtained and system updated’

    Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152160.

    then

    • go to .
  • If you contacted the customer, but were unable to obtain all the missing information, go to .

Step 4

Use Function AMEND APPLICATION, choosing the Change of Circumstances option

  • enter the customer’s NINO in the Key Entry Data screen
  • select the ‘All’ checkbox
  • select [OK]

    • If the claim is pre-award, go to .
    • If the claim is post award, go to .

Step 5

Note: From 6 April 2012, if a customer tells us within a month about a change of circumstances that increases the maximum rate of tax credits they are entitled to, their award can be amended from the date of the change. For changes notified after one month their award can only be amended one month prior to the date the change was notified.

Note: If a change is notified that does not alter or decreases the maximum rate of tax credits the customer is entitled to, it will be applied from the date of the change.

If the claim is pre-award, you will be taken to

  • the Select Application screen (select the appropriate claim)

or

  • the following message will display

‘Details must be recorded on the Free Format screen. Do you wish to proceed?’

  • select [Yes]. You will be taken to the Free Format screen
  • enter the reason for the change. For example, ‘new job for customer 1 or 2 to be added to the claim’

and enter the following details for the new job

  • customer’s name
  • customer’s NINO
  • start date of the new employment
  • place of work, for example UK
  • total number of paid jobs
  • total number of paid hours
  • employer’s reference number
  • payroll number, if available
  • employer’s name
  • employer’s address

and if the new job is a self-employed job, the Unique Taxpayer’s Reference (UTR) number

then, if the customer recently ended IS, JSA, ESA or PC, enter the following details

* type of benefit, if applicable
* start date of the benefit, if applicable
* end date of the benefit, if applicable

Note: Start or end dates for ESA claims cannot be earlier than 27/10/2008.

* PY income, if applicable

Note: You must ensure each type of income is detailed clearly, for example, the customer may have had employed income and also PY other income.

  • select [OK]
  • go to .

Note: The changes will be stored on the Free Format screen. Once the claim has been awarded, an entry will be created on the Unprocessed Change Of Circumstances work list.

Step 6

If the claim is post award, you will be taken to the Select Application screen or the Applicant Details screen.

  • If you are taken to the Select Application screen, select the claim (or claims) affected by the change and then select [OK]. You will then be taken to the Applicant Details screen, go to .
  • If you are taken to the Applicant Details screen, go to .
  • If the claim has been rejected and the customer’s current circumstances mean they now qualify for tax credits, go to .

Step 7

Check the total number of paid hours worked.

Note: Before 6 April 2012 People with children, workers aged at least 60 or a disability can qualify for Working Tax Credit (WTC) if they are working at least 16 hours weekly. People without children, workers aged under 60 or without a disability can qualify if they are aged 25 to 59 and work at least 30 hours.

Note: From 6 April 2012, couples with children will be entitled to working tax credit if they are both aged 16 or over and

  • they work at least 24 hours a week between them, with one person working at least 16 hours a week. If only one person works, that person must be working at least 24 hours a week, or
  • one person works at least 16 hours a week and the other person can’t work because they are

    • incapacitated (in receipt of certain benefits because of a disability or ill health), or
    • an inpatient in hospital, or
    • in prison either on remand or serving a custodial sentence, or
  • one person works at least 16 hours a week and that person qualifies for the disability element of Working Tax Credit, or
  • one person works at least 16 hours a week and that person is aged 60 or over.
  • people without children or a disability can qualify if they are aged 25 to 59 and work at least 30 hours or are aged at least 60 and work at least 16 hours.
  • If it is a single claim and the customer has children and/or a disability, or is aged 60 or over and the total number of paid hours worked is 16 or more, go to .
  • If it is a single claim and the customer does not have children or a disability, they are aged between 25 and 59, and the total number of paid hours worked is 30 or more, go to .
  • If it is a joint claim and at least one partner is working 16 hours weekly, go to

Note: You must follow guidance in TCM0122040 if the customer or their partner qualifies for the disability element of WTC.

  • If the total number of paid hours worked is less than 16, you won’t be able to enter the details on the computer. You must record all the relevant details on Household Notes, go to .

Step 8

Before you action the new work details, check if there is any IS, JSA, ESA or MIG/PC history for the customer who has started work

or

where the customer informs you that they were recently in receipt of IS, JSA, ESA or PC

  • enter an end date for this before proceeding with the work change by following the guidance in TCM0048100

then, return to this point and continue with this guidance

  • check the start date of the new job.

If the customer notified you of the start date before 6 April 2012 and it is

  • more than three months before today’s date and the customer failed to notify you about the change within three months, go to .
  • within three months of today’s date, go to .
  • more than three months before today’s date and the change hasn’t been applied yet (the customer originally notified TCO within three months), go to .

If the customer notified you of the start date on or after 6 April 2012 and it is

  • more than one month before today’s date and the customer failed to notify you about the change within one months, go to .
  • within one month of today’s date, go to .
  • more than one month before today’s date and the change hasn’t been applied yet (the customer originally notified TCO within one month), go to .

Step 9

Note: From 6 April 2012, if a customer tells us within a month about a change of circumstances that increases the maximum rate of tax credits they are entitled to, their award can be amended from the date of the change. For changes notified after one month their award can only be amended one month prior to the date the change was notified.

Note: If a change is notified that does not alter or decreases the maximum rate of tax credits the customer is entitled to, it will be applied from the date of the change.

In Function AMEND APPLICATION

  • go to the Work Details screen for the relevant customer
  • consider if the new weekly paid hours will increase the maximum tax credits award, that is, before any income reduction is applied.

    • If it does and you have been notified today, go to .
    • If it does and you were notified before today, go to .
    • If it doesn’t, go to .

Step 10

In Function AMEND APPLICATION

  • go to the Work Details screen for the relevant customer, if you are not already there
  • select [New]. You will be taken to the New screen
  • enter the number of paid jobs for this customer in the Number of Paid Jobs field
  • enter the total number of hours worked in the Total Hours Worked field
  • enter the start date in the Hours Worked Start Date field

    • If the new job is employed, enter the following details in the Main Employment Details section

    • employer’s reference number

    Note: If the customer hasn’t provided the employer reference number, follow the guidance in TCM0068080.

    Note: If the customer is matched to a Temporary Tax Credit Reference (TTCR), don’t enter the reference number in the Employer Reference field, you must record the new number in Function MAINTAIN HOUSEHOLD NOTES.

    Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152160.

    • payroll number, if available
    • new employment start date
    • employer’s name, if necessary
    • employer’s address, if necessary
    • phone number, if available

    • If the new job is self-employed, enter the following details in the Self Employed Details section

    • UTR number, if it is not already there
    • new employment start date

then

  • go to the Income screen for the relevant customer and enter any PY income, where no previous income has been recorded
  • where the customer has started employment for the first time, update the Place of Work History Details. Follow the guidance in TCM0050100
  • select [OK]. You will be taken to the Amend Finish screen
  • go to .

Step 11

In Function AMEND APPLICATION

  • go to the Work Details screen for the relevant customer, if you are not already there
  • select [New]. You will be taken to the New screen
  • enter the number of paid jobs for this customer in the Number of Paid Jobs field
  • enter the total number of hours worked in the Total Hours Worked field
  • enter the start date in the Hours Worked Start Date field

    • If the new job is employed, enter the following details in the Main Employment Details section

    • employer’s reference number

    Note: If the customer hasn’t provided the employer reference number, follow the guidance in TCM0068080.

    Note: If the customer is matched to a Temporary Tax Credit Reference (TTCR), don’t enter the reference number in the Employer Reference field, you must record the new number in Function MAINTAIN HOUSEHOLD NOTES.

    Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152160.

    • payroll number, if available
    • new employment start date
    • employer’s name, if necessary
    • employer’s address, if necessary
    • phone number, if available

    • If the new job is self-employed, enter the following details in the Self Employed Details section

    • UTR number, if it is not already there
    • new employment start date

then

  • select ‘History’ on the toolbar menu
  • select ‘Hours Worked’ from the options available. You will be taken to the History screen
  • select the first entry
  • select [Change]. The Change screen will display
  • delete the existing date in the Include From Date field
  • calculate the date either three months or one month prior to the date the customer notified TCO and make a note of the date
  • enter the calculated date in the Include From Date field
  • select [OK]. The following message will display

‘You must enter a CY income’

  • select [OK]. This will delete the message
  • select [OK]. You will be taken to the Work Details screen
  • go to the Income screen for the relevant customer
  • enter the PY income, where no previous income has been recorded, if applicable

Note: You must ensure each type of income is detailed clearly, for example, the customer may have had employed income and also PY other income.

  • where the customer has started employment for the first time, update the Place of Work History Details. Follow the guidance in TCM0050100
  • select [OK]. You will be taken to the Amend Finish screen
  • go to .

Step 12

In Function AMEND APPLICATION

  • go to the Work Details screen for the relevant customer, if you are not already there
  • select [New]. You will be taken to the New screen
  • enter the number of paid jobs for this customer in the Number of Paid Jobs field
  • enter the total number of hours worked in the Total Hours Worked field
  • enter the start date in the Hours Worked Start Date field

    • If the new job is employed, enter the following details in the Main Employment Details section

    • employer’s reference number

    Note: If the customer hasn’t provided the employer reference number, follow the guidance in TCM0068080.

    Note: If the customer is matched to a Temporary Tax Credit Reference (TTCR), don’t enter the reference number in the Employer Reference field, you must record the new number in Function MAINTAIN HOUSEHOLD NOTES.

    Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152160.

    • payroll number, if available
    • new employment start date
    • employer’s name, if necessary
    • employer’s address, if necessary
    • phone number, if available

    • If the new job is self-employed, enter the following details in the Self Employed Details section

    • UTR number, if it is not already there
    • new employment start date

then

  • select ‘History’ on the toolbar menu
  • select ‘Hours Worked’ from the options available. You will be taken to the History screen
  • select the first entry
  • select [Change]. The Change screen will display
  • delete the existing date in the Include From Date field
  • enter the start date of the new job in the Include From Date field
  • select [OK]. The following message will display

‘You must enter a CY income’

  • select [OK]. This will delete the message
  • select [OK]. You will be taken to the Work Details screen
  • go to the Income screen for the relevant customer
  • enter the PY income, where no previous income has been recorded, if applicable

Note: You must ensure each type of income is detailed clearly, for example, the customer may have had employed income and also PY other income.

  • where the customer has started employment for the first time, update the Place of Work History Details. Follow the guidance in TCM0050100
  • select [OK]. You will be taken to the Amend Finish screen
  • go to .

Step 13

Note: Claims made on or after 6 April 2012 may be backdated up to 31 days.

Note: Claims made prior to 6 April 2012 may be backdated up to 93 days.

If the customer is now eligible for tax credits

  • invite them to make a fresh claim. Follow the guidance in TCM0044080
  • take no further action.

Note: Before you can invite a fresh claim, you must check whether the household is in a closed postcode area to prevent new claims being issued to working age households in these areas.  The exception to this is for those households that contain an individual of Pension Credit Qualifying Age (PCQA), as these will be allowed to claim tax credits.  Following the guidance in TCM0044080 will take you through the necessary steps.

Step 14

On the Amend Finish screen

  • enter the date the notification of the change was received
  • enter the source of the change as paper or phone
  • enter the reason for the change as ‘Change of Circumstances’
  • select [OK]. The computer will accept the change of circumstances and will apply the change at the effective date

    • If the message ‘S18 Refinalisation Rules - Potential inappropriate refinalisation for CCYY-CCYY. If you have the authority to refinalise under S19, S20 or S21 of the Tax Credit Act 2002 or due to an appeal decision. Press OK to process the change or Cancel’ displays

    • the changes you are making will re-finalise the claim, follow the guidance in TCM0042260 before making any changes

    then, if you can make the change

    • select [OK] on the message
    • go to .

    • If the message ‘S18 Refinalisation Rules - Actual Income for CCYY-CCYY is required. This change will not be accepted’ displays

    • you won’t be able to make the change because the PY actual income is required, follow the guidance in TCM0042260 before making any changes

    then, if you can make the change

    • select [OK] on the message
    • go to .

    • If the message ‘S18 Refinalisation Rules - You do not have the authority to refinalise CCYY-CCYY. This change will not be accepted. Please refer to the appropriate team’ displays

    • the changes you are making will refinalise the claim
    • select [Cancel]. You will be taken to the Amend Application Details screen
    • select [Cancel]
    • when the message ‘All changes to the application will be lost for this session, do you wish to proceed?’ displays, select [Yes]
    • pass the case to a Level 2 User or your manager. For more information, use ‘Level 1 and Level 2 users’ on TCM0320260
    • take no further action.

    • If none of the above messages display, go to .

Step 15

Use Function MAINTAIN HOUSEHOLD NOTES to record the action you have taken

Note: The message you need to record will be dependent on which course of action you have taken. For example, if you followed the action in step 10 record the message for step 10.

  • Step 3 - ‘TCMZ Unable to deal with the change of circumstances. Unable to contact (enter customer’s name) (state what details are missing) (include date notified and the date(s) the change actually occurred) (include BF date if reminder cycle has been set)’

or

  • Step 3 - ‘TCMZ Contacted (enter customer’s name) but haven’t obtained all the required information (state what details are missing) (include date notified and the date(s) the change actually occurred) (include BF date if reminder cycle has been set)’

or

  • Step 3 - ‘TCMZ Contacted (enter customer’s name) PY income details haven’t been received all other employment details obtained and system updated (include date notified and the date(s) the change actually occurred) (include BF date if reminder cycle has been set)’

or

  • Step 10 - ‘TCMZ (Customer’s name) hours worked increased from XX to XX on (DD/MM/YY) entered on system’

Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152160.

then

  • go to .

Step 16

Complete form MS164 and send it with any relevant correspondence to storage. Follow the guidance in TCM0074140.