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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
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Payment - hardship (general): Hardship - manually backdating payment adjustments (AG)

Background

You may be in a situation where the request for a payment adjustment was made more than five working days before its being actioned.

Where this is the case, you’ll need to

  • calculate the number of days from the sixth working day to yesterday
  • calculate the value of the adjustment for that period
  • issue a manual cashcheque for that amount.

You must complete the third part of the TCO - adjust in year payments pro-forma (Word 46KB) while working through these instructions.

Guidance

To deal with a payment adjustment that requires backdating, consider steps 1 to 8.

Step 1

Enter the date that the initial request was made at part 3, step 18 on the TCO - adjust in year payments pro-forma.

Step 2

Calculate the number of days from the initial request date to the date of receipt of the hardship claim.

Note: Don’t count the first five working days. The first calendar day after the fifth working day is day one, and count all subsequent days (including weekends) up to and including yesterday.

Note: Count the date of receipt of the hardship claim as the first day of the five working days - for example, if the letter was received on 21/06/05, then day one would be 28/06/05.

  • enter the number of days at part 3, step 18 on the form

then

  • go to .

Step 3

Use Function ADJUST IN YEAR PAYMENTS to view the approximate adjusted payment amount

Note: Function ADJUST IN YEAR PAYMENTS can only be accessed by using the AMBS Overpayment Recovery Maintainer user role.

  • enter the appropriate percentage, as determined by the category of the award, in the ‘% of Remaining Entitlement Authorised for Payment’ field. Confirmation of this can be found at part 1, steps 10 or 11 on the form
  • select [Display Results]
  • enter the approximate payment amounts and frequency at part 3, step 20 on the form.

Note: The frequency displayed will be the customer’s payment frequency. You must ensure this is the frequency you use in subsequent calculations.

Step 4

Use Function VIEW AWARD to check the amount and frequency of the customer’s regular payments at the time the initial request was received

  • go to the Select Award screen and select the latest award version
  • select [OK]. You’ll be taken to the Award Summary screen
  • select [Payment Details]. You’ll be taken to the Payment Details screen
  • from the details for today’s date, enter the amount and frequency of the payment made for CTC and WTC that’s shown as ‘Regular’ in the Payment Type column at part 3, step 21 on the form. You’ll need to check each tax credit type separately

Note: Where the regular WTC amount was paid by PVE, take the regular daily amount and multiply by seven to reach a weekly amount. Remember to add together any PVE and Bank payment methods to make a total WTC regular payment.

  • subtract this amount from that recorded at part 3, step 20 on the form
  • enter the difference between these amounts at part 3, step 22 on the form.

Step 5

If the pay frequency was

  • weekly

    • divide the amount noted at step 22 on the form by seven
    • enter the daily rate at part 3, step 23 on the form.
  • four-weekly

    • divide the amount noted at step 22 on the form by 28
    • enter the daily rate at part 3, step 23 on the form.

Step 6

Multiply the daily rate by the number of days recorded at part 3, step 19 on the form

  • enter this amount at part 3, step 24 on the form

Note: Round the resulting figure up to the nearest penny.

then

  • go to .

Step 7

Request a manual payment for the amount you have calculated at part 3, step 24 on the form. Follow the guidance in TCM0220100.

Note: If the amount of the manual payment is under £1, don’t issue the cashcheque. Instead, return to the guidance that instructed you to backdate.

Step 8

Prepare and issue letter TC886 (Word 124KB) to the customer

  • use Function MAINTAIN HOUSEHOLD NOTES to record the following message

‘TCMZ Clerical backdated MAPTH payment and letter TC886 has been issued to (please insert the name of the customer) for £XXXXX R92TC No XXXXXXXX’

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

then

  • return to the guidance that you were previously following.