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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
, see all updates

Claims - work lists (VFs - 1 to 12): Verification Failures work list - Rule 9/10/11 - No PC, IS, JSA or ESA entitlement

Version 2.0

Changes to previous version - amended guidance. New step 23. All subsequent steps renumbered. New ‘If statement’ added to end of step 24.

Checklist

Before you follow this guidance, make sure

  • 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’re in the correct MU. Use TCM0322460 for the correct MU number.

Background

Customers receiving Pension Credit (PC), Income Support (IS), income-based Jobseeker’s Allowance (JSA(IB)) or income-related Employment and Support Allowance (ESA(IR)) are entitled to a maximum tax credits award.

An entry will be made on the Verification Failures work list where the information regarding any of these benefits on the tax credits computer differs from the information held by Department for Work and Pensions (DWP) or Department for Social Development (DSD).

Checks against the DWP/DSD interface will take place every time there is a relevant change to the DWP/DSD record or the tax credits claim.

Note: From October 2003, MIG cases were migrated to PC. However, the tax credits computer still refers to these cases as MIG.

Note: The tax credits computer records customers getting either JSA or ESA as getting JSA.

Note: The Verification Failures work list will always indicate that the failure is for customer 1 even if the failure is for customer 2. In a joint claim, you must also make enquires for customer 2.

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 or Data Security Team for advice.

Step 1

If you’re dealing with a new work list item, go to .

If you’ve written to the customer and are dealing with an expired action date or returned correspondence, go to .

If you’ve set an action because you’re waiting for DWP/DSD to make a decision on a claim and the action date has expired, go to .

Step 2

Access the Verification Failures work list. For how to do this, use TCM1000004 

  • check whether you can continue to process the work list item. Follow the guidance in TCM0138020 

Note: When following TCM0138020, make a note of any messages in Household Notes that indicate the case has been affected by the four-week run-on process and the employment end or benefit start dates used have been changed.

then, if you can continue to process the work list item

  • go to .

Step 3

Check the reason for the verification failure. For how to do this, use TCM1000107.

If a verification failure rule 2, 4, 5 or 12 is shown (with or without any other rules), transfer the case to appropriate MU. Use TCM0322460 for the correct MU number. For how to do this, use TCM1000304.

Note: If there’s more than one failure rule shown, transfer in the priority order listed above.

If a verification failure rule 9, 10 or 11 is shown (with or without any other rules), go to .

Note: This doesn’t include rules 2, 4, 5 or 12. These should be transferred.

If there isn’t a verification failure rule 9, 10 or 11 shown but there is a rule 7, 3, 6 or 8 shown, transfer the case to appropriate MU. Use TCM0322460 for the correct MU number. For how to do this, use TCM1000304.

Note: If there’s more than one failure rule shown, transfer in the priority order listed above.

Step 4

Check the status of the claim. For how to do this, use TCM1000025.

If the status of the claim is ‘Terminated’

  • change the verification status of the failed claim. For how to do this, use TCM1000247 
  • take no further action.

If the status of the claim is anything other than ‘Terminated’, go to .

Step 5

Check the benefit history screens for all benefit interests displayed. For how to do this, use TCM1000454 

Note: Select JSA from the menu if the relevant benefit is either JSA or ESA.

  • note any start, end and include from dates
  • go to .

Step 6

Use the Access to DWP Data (ADD) system to check the customers DWP benefit details. For how to do this, use TCM1000014 

Note: For advice on how to use the ADD system, use the ADD manual.

  • check every period of benefit awarded in ADD relevant to the start date of the tax credit award
  • make a note of relevant benefits that have, or are being paid, and any start and end dates
  • note if there is a partner shown or not

Note: This is shown in the ADD Relationship History screen.

  • check ADD for both customers on joint tax credit claim.

If ADD shows the same amount of JSA(IB) as JSA(C), or the same amount of ESA(IR) as ESA(C) and the total amount paid equals the same amount 

For example: JSA(C) is shown as £54.25, JSA(IB) is shown as £54.25 and the total amount of JSA paid is shown as £54.25.

  • treat the customer as receiving JSA(C) or ESA(C)
  • go to .

If ADD shows both JSA(C) and JSA(IB) or ESA(C) and ESA(IR) and the amount of the JSA(IB) or ESA(IR) is more than the JSA(B) or ESA(B) 

For example: JSA(C) is shown as £89.90 and JSA(IB) is shown as £90.00.

  • treat the customer as receiving JSA(IB) or ESA(IR)
  • go to .

If ADD shows the case is being handled clerically, go to .

Note: This is only if ADD indicates the case is fully maintained clerically. If ADD only shows a clerical adjustment, treat the customer as receiving the benefit details shown.

If ADD indicates that DWP hasn’t yet made a decision on the claim 

  • refer the case to your TALLO
  • go to .

Note: If you have access to CES, this may be used in addition to ADD for clarification.

If ADD shows information you are unclear about 

  • refer the case to your TALLO
  • go to .

If ADD shows any other information, go to .

Step 7

If the TALLO advises you that DWP have provided a date by which they expect to have made a decision on the claim 

  • set an action date for the date provided on the ‘Verification Failures’ work list. For how to do this, use TCM1000008 
  • transfer the case to the ‘BF’ MU. For how to do this, use TCM1000023 
  • update Household Notes with standardised message HQ10 from TCM0160020. For how to do this, use TCM1000001 
  • take no further action.

If the TALLO provides an explanation of the customers DWP benefits, go to .

If the case has been referred to the TALLO for any other reason or neither of the above circumstances apply, take the action advised by your TALLO.

Step 8

Compare the DWP details with the benefit details on the tax credits computer.

Note: The word ‘benefit’ refers to a benefit that entitles the customer to a maximum tax credit award, unless stated otherwise.

If ADD shows an end date for a benefit that is in the future, go to .

If ADD shows contribution based JSA (JSA(C)) or contributions-based ESA (ESA(C)) and the tax credits computer shows JSA(IB) or ESA(IR), go to .

If the start date of the benefit on ADD differs to the start date of the benefit on the tax credits computer, go to .

If the end date of the benefit on ADD differs to the end date of the benefit on the tax credits computer, go to .

If ADD shows an end date for one benefit followed by the start date of another benefit, go to .

For example: the customer was getting IS this has ended and the customer is now getting JSA(IB).

If ADD shows one benefit and the tax credits computer shows a different benefit 

For example: ADD show JSA(IR) and the tax credit computer shows IS.

Note: ESA(IR) will always show as JSA on the tax credit system.

  • correct the benefit details on the tax credit computer
  • go to .

If ADD shows benefit details and no benefit is shown on the tax credit computer, go to .

If ADD doesn’t show any benefit and a benefit is shown on the tax credit computer 

  • contact the customer to obtain any income or work details
  • go to .

If ADD shows several periods of entitlement to benefits and the tax credits computer shows these or other benefits but the periods of award differ, go to .

Step 9

Note: The presence of a future end date indicates that DWP will review entitlement to benefit in the future and a new decision will be made. If this differs from the information on the tax credit computer, a new verification failure will be created.

If the only discrepancy between ADD and the information on the tax credits computer is the presence of a future end date, go to .

If ADD shows a future end and there are other discrepancies between ADD and the information on the tax credits computer 

  • enquires shouldn’t be made concerning the future end date
  • resolve the other discrepancies as instructed
  • go back to .

Step 10

Check if the customer has reported income from Social Security benefits. For how to do this, use TCM1000249.

If the customer has reported a Social Security benefit figure, go to .

If the customer hasn’t reported a Social Security benefit figure 

  • contact the customer to obtain a taxable Social Security benefit figure
  • go to .

Step 11

Check the start date of the award. For how to do this, use TCM1000406.

If the start or end date (or both dates) on the tax credits computer are within 19 days of the relevant dates on ADD, go to .

If the benefit start date on the tax credits computer is the same as the start date of the claim and the benefit start date on ADD is earlier than the start date of the claim, go to .

If you noted a message in Household Notes earlier that indicated this was a four-week run-on case and the DWP/DSD date is within the run-on period, go to .

If the start date or end on the tax credits computer differs by more than 19 days from the start or end date on ADD 

  • contact the customer to obtain any income or work details for the period ADD indicates they weren’t receiving benefits
  • go to .

Step 12

If the gap between the end of one benefit or period of entitlement and the start of another is 19 days or less

  • correct the benefit details on the tax credit computer
  • go to .

If the gap between the end of one benefit or period of entitlement and the start of another is more than 19 days or they are no longer entitled to benefit 

  • contact the customer to obtain any income or work details for the period ADD indicates they weren’t receiving benefits
  • go to .

Step 13

Check if work details are present. For how to do this, use TCM1000249.

If the customer has any work details present

  • contact the customer for details of any changes of circumstance
  • go to .

If the customer hasn’t any work details present

  • enter the benefit details on the tax credits computer
  • go to .

Step 14

Before contacting the customer, check linked work items to determine if there are any unprocessed change of circumstances. For how to do this, use TCM1000409.

If there are any unprocessed change of circumstances, go to .

If there aren’t any unprocessed change of circumstances, go to .

Step 15

Follow the guidance in TCM0054060 but don’t contact the customer at this stage

then

  • return to this guidance.

If you have worked the unprocessed change of circumstances and resolved the discrepancies between the DWP information and the tax credits computer, go to .

If working the unprocessed change of circumstances hasn’t resolved the discrepancies between the DWP information and the tax credits computer or you can’t work the unprocessed change of circumstances without contacting the customer, go to .

Step 16

Contact the customer for the information you need to resolve the verification failure and if applicable any unprocessed change of circumstances. Follow the guidance in TCM0094080 

  • inform the customer that we’ve received information from DWP that indicates the benefit information on their tax credits claim is incorrect
  • query any benefit start and end dates that the customer provides that don’t match the DWP information in ADD
  • tell the customer that you will amend their tax credits award in line with the DWP information and if they believe the dates are incorrect they should contact DWP.

If the customer provides the information you need, go to .

If the customer can’t provide the information or you aren’t able to speak to them and this is the first time you’ve attempted to contact them

  • send the customer form TC664 requesting the information you need
  • set an action date of 15 days in the future on the ‘Verification Failures’ work list. For how to do this, use TCM1000008 
  • transfer the case to the ‘BF’ MU. For how to do this, use TCM1000023 
  • update Household Notes with message HQ07 from TCM0160020. For how to do this, use TCM1000001 

Note: If there’s an unprocessed change of circumstances, you’ll need to set an action date and transfer this item to the relevant BF MU.

  • take no further action.

If the customer can’t provide the information or you aren’t able to speak to them and they have previously been sent a form TC664 but they haven’t had a reminder form sent to them 

  • send the customer reminder form TC1059 and a duplicate of form TC664 requesting the information you need

Note: If the customer has provided a partial response consider retuning the original TC664 with the unanswered questions highlighted or create a new TC664 for the missing information

  • set an action date of 15 days in the future. For how to do this, use TCM1000008 
  • update Household Notes with message HQ08 from TCM0160020. For how to do this, use TCM1000001 

Note: If there’s an unprocessed change of circumstances, you’ll need to amend the action date on this work list item.

  • take no further action.

If the customer can’t provide the information or you aren’t able to speak to them and they’ve previously been sent a form TC664 and a reminder form TC1059, go to .

Step 17

If the information you requested was in relation to the verification failure only, go to .

If the information you requested was in relation to the verification failure and an unprocessed change of circumstances and the customer has provided enough information to process one of these, go to .

If the information you requested was related to the verification failure and an unprocessed change of circumstances and the customer hasn’t provided enough information to process either, go to .

Step 18

Check Household Notes, the details on the tax credits computer and any information received from the customer to determine if the customer has provided all the information requested and if any change of circumstances have been applied. For how to do this, use TCM1000067 and TCM1000249.

If the customer has provided all the information requested and the necessary changes of circumstances have been applied, go to .

If the customer has provided all the information requested but the necessary changes of circumstances haven’t been applied, go to .

If the customer has failed to respond to enquires or hasn’t provided all the information required, go to .

Step 19

Use ADD to check if DWP/DSD has made a decision on the customer’s benefit.

Note: For advice on how to use ADD, follow the ADD manual. For how to do this, use TCM1000014.

If a decision has been made and the benefit details have been updated, go to .

If there isn’t a change to ADD

  • contact your TALLO
  • go to .

Step 20

Update the customer’s award

  • follow the relevant Changes guidance

then

  • return this guidance.

Note: You should use any work or income details provided by the customer, if the customer has gone from work in to benefit or off benefit in to work you should enter employment start and end dates in line with DWP benefit start or end dates unless the relevant tax credits guidance instructs you to enter an alternative date - for example, in four-week run-on cases.

If the changes have resolved the discrepancies between the DWP information and the tax credits computer, go to .

If the changes haven’t resolved the discrepancies between the DWP information and the tax credits computer, go to .

Step 21

Amend the tax credits computer to reflect the DWP benefit information.

Note: ESA or JSA must be entered as JSA.

Check the start date of the claim, you may have noted this earlier. For how to do this, use TCM1000406.

If the tax credit claim has differed from the DWP information continuously since the start date of the claim, and the customer has no ongoing benefit entitlement

  • correct the tax credit claim by following the guidance in TCM0042160 

then

  • return to this guidance

Note: If, after following TCM0042260, you aren’t able to enter any of the DWP dates, apply the change from 6 April of the earliest unfinalised year.

  • go to .

If the tax credit claim differed from the DWP information at the start date of the claim but at a later date the customer became entitled to benefit, or the tax credit claim has differed from the DWP information after the start date of the claim 

  • correct the tax credit claim by following the guidance in TCM0044260 

then

  • return to this guidance

Note: If, after following TCM0042260, you aren’t able to enter any of the DWP dates, apply the change from 6 April of the earliest unfinalised year.

  • go to .

Step 22

If the customer’s benefit details now reflect the customer’s current and historic DWP details as far as possible with reference to TCM0042260, go to .

If there are other periods of benefit entitlement that differ from DWP records

  • enter the correct periods on the tax credit computer, follow the guidance in TCM0048100 

then

  • return to this guidance

Note: If, after following TCM0042260, you aren’t able to enter any of the DWP dates, apply the change from 6 April of the earliest unfinalised year.

  • go to .

Step 23

Check

  • whether the Annual Declaration is ‘reply required’ or ‘auto renew’. For how to do this, use TCM1000204
  • the status of the renewal. For how to do this, use TCM1000153.

If the change you’ve made relates to PY and the S17 notice is ‘Auto Renew’ and PY is not finalised

  • mark the S17 notice as ‘not served’. For how to do this, use TCM1000103 
  • issue SEES letter TC1119, advising the customer that they’ll shortly receive an Annual Review form TC603R and Annual Declaration TC603D to check and reply to
  • go to .

If the change you’ve made relates to PY and the S17 notice is ‘reply required’ or PY is finalised, go to .

If the change you’ve made relates to CY only, go to .

Step 24

Change the verification status of the failed claim. For how to do this, use TCM1000247 

  • update Household Notes with the appropriate message from TCM0160020. For how to do this, use TCM1000001 

    • HQ01 - DWP start or end dates, or both dates, are within 19 days of the equivalent dates on the tax credits computer
    • HQ14 - DWP case is being handled clerically
    • HQ09 - Benefit start date on the tax credits computer is the same as the start date of the claim and the DWP start date is earlier
    • HQ13 - Benefit start date on the tax credit computer differs due to the four-week run
    • HQ12 - DWP shows a future end date
    • HQ04 - DWP shows contribution based benefit and the tax credits computer showed income related benefit
    • HQ06 - Customer was never in receipt of benefit and you have amended the tax credit system to reflect this
    • HQ02 - You have amended the tax credits computer to reflect the customer’s correct DWP benefit entitlement
    • SW28 - You have amended the S17 notice as ‘not served’ and issued letter TC1119 to the customer
  • go to .

Step 25

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Step 26

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Step 27

If you have obtained any information from the customer or DWP on form TC648 or TC664 

  • send the documents to storage, follow the guidance in TCM0074140 
  • go to .

If you haven’t had information from the customer to resolve the verification failure or any change of circumstance, go to .

Step 28

If there was an unprocessed change of circumstance for the customer and they failed to reply to your enquiries in relation to this, follow TCM0054060 from step 22 onwards.

If the customer didn’t have an unprocessed change of circumstances or they did have one and provided the information to process it, take no further action.