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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
, see all updates

Payment - manual payment: Manual payment - calculating and scheduling payments -TCO

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.

Background

There are a number of situations where it is necessary to make a manual payment to a customer. These can be made by ‘User Requested Payment’ (URP) or R92TC.

Note: ‘URP’s will be paid by Bacs from April 2011 where account details are available in function ‘Amend Application’.

Note: Function ‘User Requested Payment’ can not be used for the following manual payment reasons

  • awaiting award (pre award claims)
  • no trace
  • RLS or the address on the tax credits computer is incorrect
  • incorrectly ended cases where entitlement has ended incorrectly in error but the customer still has ongoing entitlement to tax credits.

A ‘URP’ can only be made where there is, or has been an award for the household for the tax credit period the payment is being created for, and a household account exists for that year. If a household account does not exist then the R92TC payment process must be used.

Note: The preferred payment method for R92TC is by Payable Order if the customer has a bank or Building Society account. Payable Orders can not be paid into a Post Office card account (POca). If the customer has a POca payment must be made by cashcheque.

These calculations match the process carried out by the tax credits computer when profiling payments. For more information on payment profiling, use TCM0232200.

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

Note: If the identified payment problem is affecting more than one award period, the following guidance must be followed for each award period separately.

If there is no Compliance activity or Compliance do not require the claim and you are dealing with an appeal, a customer’s complaint on the Customer Service and Support Group (CSSG) or a claim on the Fast Track Team (FTT)

  • open the Manual payment calculation sheet (Excel 118KB)
  • select the ‘Calculation’ sheet tab
  • go to .

If you are a member of a Compliance Team

  • open the Manual payment calculation sheet (Excel 118KB)
  • select the ‘Calculation’ sheet tab
  • go to .

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

Step 2

Check if there is a tax credits claim for either or both customers. For how to do this, use TCM1000076.

If there is a tax credits claim for either or both customers, go to .

If the message ‘No Match Found’ displays, go to .

Step 3

Check who is the nominated recipient for the payments of tax credits on the latest claim. For how to do this, use TCM1000485.

If the customer who has made contact is the nominated recipient

  • record their name and NINO as customer 1 on the Calculation sheet
  • go to .

If there is another customer

  • record their name and NINO as customer 2 on the Calculation sheet
  • go to .

If the customer who has made contact is not the nominated recipient

  • record their name and NINO as customer 2 on the Calculation sheet
  • record the other customer’s name and NINO as customer 1 on the Calculation sheet
  • enter whether customer 1 or customer 2 is the nominated recipient for WTC, CTC or both tax credits on the Calculation sheet
  • go to .

Step 4

Trace the claim. Follow the guidance in TCM0136560.

If a claim can be found

  • use the details of the traced claim to access the latest claim version
  • go back to .

If a claim can not be found

  • complete an M1 referral form. Follow the guidance in TCM0136560
  • take no further action.

Step 5

Check if the claim version has progressed to award. For how to do this, use TCM1000484.

If the message ‘No matching record found for Award Version table’ displays

  • the claim version has not progressed to award
  • select ‘OK’
  • select ‘Cancel’. You will be taken back to the ‘Function Menu’
  • go to .

If the message ‘No matching record found for Award Version table’ does not display

  • the claim version has progressed to award. You will be taken to the ‘Award Summary’ screen
  • select ‘Menu’. You will be taken back to the ‘Function Menu’
  • go to .

Step 6

Use function ‘View Household Account’ to check if a payment schedule has been set up. For how to do this, use TCM1000074.

If a payment schedule has been set up, go to .

If a payment schedule has not been set up, go to .

Step 7

Using the information on the ‘View Direct Payment Schedule’ screen, establish if payments are currently being issued by the tax credits computer.

If payments are currently being issued by the tax credits computer, go to .

If payments are not currently being issued by the tax credits computer, go to .

Step 8

Using the information on the ‘View Direct Payment Schedule’ screen, establish if the payments are currently suspended.

If the payments are currently suspended, go to .

If the payments are not currently suspended, go to .

Step 9

Use function ‘Maintain Payment Suspension’ to check if a payment suspension has been set. For how to do this, use TCM1000368.

Note: Check if there is a payment suspension reason for both customers, where applicable.

If the payment suspension reason is ‘PXCS Error - Do Not Remove’

  • refer the case to your Technical Advice Line Liaison Officer (TALLO) for further advice
  • take the appropriate action as advised by your TALLO.

If the payment suspension reason is anything else

  • make a note of the suspension reason
  • go to .

If there is no payment suspension reason, go to .

Step 10

Use function ‘View Household Notes’ to check for a message which states the payment suspension should not be lifted. For how to do this, use TCM1000067.

If there is a message which states the payment suspension should not be lifted

  • refer the case to your TALLO for further advice
  • take the appropriate action as advised by your TALLO.

If there is no message, go to .

Step 11

Use function ‘View Household Notes’ to check for a message explaining the reason for the payment suspension. For how to do this, use TCM1000067.

If there is no message explaining the reason for the payment suspension

  • refer the case to your TALLO for further advice
  • take the appropriate action as advised by your TALLO.

If there is a message explaining the reason for the payment suspension

  • take the appropriate action as detailed in the message
  • update Household Notes with the action you’ve taken. For how to do this, use TCM1000001.

Step 12

Determine the customer’s entitlement using the ‘SEES’ ‘Tax Credits Entitlement Calculator’ and populate the spreadsheet. For how to do this, use TCM1000490.

If there is no entitlement

  • take no further action.

If there is entitlement

  • complete section 2 of the Calculation sheet using the data from the ‘SEES’ ‘Tax Credits Entitlement Calculator’ print out
  • go to .

Step 13

If there is entitlement to Healthy Start vouchers

  • complete a Manual voucher - BDP request (Word 37KB) stencil
  • send it by email to the designated email inbox (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • go to .

If there is no entitlement to Healthy Start vouchers, go to .

Step 14

If the award period has already ended

  • enter the award end date
  • go to .

If the award period has not already ended

  • enter the last day of the tax year for the entitlement period
  • go to .

Step 15

Determine the household pay day. For how to do this, use TCM1000288.

If the claim version has progressed to award

  • the pay day may already have been established
  • go to .

If the claim version has not progressed to award

  • use today’s day as the pay day

Note: Use Monday if today’s day is a Saturday or Sunday.

  • record this date in the ‘Household Pay Day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet

Note: The next household pay day is two weeks from today’s date, that is the same day two weeks later. For example, today is Tuesday 09/02/2010, the next household pay day will be 23/02/2010.

  • record this date in the ‘Date of next HH pay day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • go to .

Step 16

Check for any entries on the ‘View Direct Payment Schedule’ screen. For how to do this, use TCM1000312.

If there are no entries on this screen

  • on the ‘View Direct Payment Schedule’ screen

    • check the previous award period. For how to do this, use TCM1000312
    • select the previous award period
  • go to .

If there are entries on this screen

  • use a calendar to determine the day on which the dates in the ‘Due Date’ column fall

Note: They should all be the same day of the week. This will be the household pay day.

  • record this day in the ‘Household pay day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • go to .

Step 17

Determine the household pay day

  • use a calendar to determine the day on which the dates in the ‘Due Date’ column fall

Note: They should all be the same day of the week. This will be the household pay day.

  • record this day in the ‘Household pay day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • go to .

Step 18

Determine the due date of the next payment.

Note: This date is treated in the same way as the tax credits computer uses today’s date when profiling payments and will be used extensively in the subsequent steps.

If the award period has not already ended

  • use the gap between the dates in the ‘Due Dates’ column in the ‘View Direct Payment Schedule’ screen to determine the payment frequency, whether weekly or four weekly
  • go to .

If the award period has already ended

  • use the end date of the award period as the next household pay day
  • record this date in the ‘Date of next HH pay day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • complete the ‘WTC’ and ‘CTC’ boxes in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet, using the data from the SEES Tax Credits Entitlement Calculator print out

Note: This will be the same as the details entered at section 2 of the Calculation sheet.

  • go to .

Step 19

Determine the due date of the next payment when the award period has not already ended.

If no payments have been issued by the tax credits computer in the relevant award period

  • the next household pay day is two weeks from today’ s date, that is the same day two weeks later. For example, today is Tuesday 09/02/2010, the next household pay day will be 23/02/2010
  • record this date in the ‘Date of next HH pay day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • go to .

If the payment frequency is four weekly and the due date of the last payment issued by the tax credits computer was 21 days or less before today’s date

  • use the due date of the next scheduled payment as the next household pay day. For example, the due date of the last payment issued by the tax credits computer was Thursday 04/02/2010 and today is Tuesday 23/02/2010, the next household pay day will be 04/03/2010
  • record this date in the ‘Date of next HH pay day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • go to .

If the payment frequency is four weekly and the due date of the last payment issued by the tax credits computer was more than 21 days before today’s date

  • the next household pay day is 35 days after the due date of the last payment. For example, the due date of the last payment issued by the tax credits computer was Thursday 04/02/2010 and today is Tuesday 02/03/2010, the next household pay day will be 11/03/2010
  • record this date in the ‘Date of Next HH pay day’ box in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • go to .

If the payment frequency is weekly

  • the next household pay day is the second pay day from today’s date. For example, the due date of the last payment issued by the tax credits computer was Thursday 04/02/2010 and today is Tuesday 09/02/2010, the next household pay day will be 18/02/2010
  • record this date in the ‘Date of next HH pay day box’ in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • go to .

Step 20

Determine the entitlement up to the next household pay day. To do this

  • use the ‘SEES Tax Credits Entitlement Calculator’. For how to do this, use Step 1 of the guidance TCM1000493
  • remove any change of circumstances where the start date is after the date of the next household pay day, recorded in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet
  • add a change of circumstances with the next household pay day as the effective date of the claim or change of circumstance and remove all elements
  • select ‘Calc’
  • select ‘Print’

Note: Only select the ‘View Calculation sheet’ for printing off.

  • complete the ‘WTC’ and ‘CTC’ boxes in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet, using the data from the ‘SEES Tax Credits Entitlement Calculator’ print out
  • go to .

Step 21

Note: All customers receiving more than the family or baby element of CTC only are entitled to a 10% or 25% restriction on the recovery of an in-year overpayment, the customer does not need to claim hardship for the restriction to be applied. Recovery of overpayments from other payments of tax credits is set at 100% for the CTC family or baby element only.

Check if the customer will qualify for an in-year adjustment. For how to do this, use TCM1000488.

If a monetary value is shown for the ‘Family’ or ‘Baby’ elements in the ‘Tapered Ent’ column and all other values are 0.00 in the current entitlement period

  • 100% of the award should be paid, no adjustment is required
  • select ‘100%’ from the ‘Category of Award’ field in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet

Note: The adjusted remaining WTC and CTC entitlement will be populated automatically with zeros.

  • go to .

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If none of the above apply, go to .

Step 22

Determine if the customer will be entitled to a 10% or 25% payment adjustment

  • check if the customer is currently in receipt of the maximum award for CTC and/or WTC. For how to do this, use TCM1000492.

If there is no amount in the ‘Taper Amount’ column for the ‘Child’ and/or ‘Work’ element

  • the customer is in receipt of the maximum award of CTC and/or WTC
  • the claim is a ‘Category A’ award and requires an adjustment of 10%

Note: This will restrict the recovery of any overpayment to 10% of the remaining entitlement.

  • select ‘10%’ from the ‘Category of Award’ field in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet

Note: The adjusted remaining CTC and WTC entitlement will be populated automatically.

  • go to .

If there is an amount in the ‘Taper Amount’ column for the ‘Child’ and/or ‘Work’ element

  • the claim is a ‘Category B’ award and requires an adjustment of 25%

Note: This will restrict the recovery of any overpayment to 25% of the remaining entitlement.

  • select ‘25%’ from the ‘Category of award’ field in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet

Note: The adjusted remaining CTC and WTC entitlement will be populated automatically.

  • go to .

Step 23

Determine the amount paid up to the next household pay day and due to be issued by the tax credits computer

  • check for any payments made. For how to do this, use TCM1000486.

If the message ‘No information available. Payment has not yet been issued’ displays for any payment

  • that payment has not been issued
  • disregard that payment
  • go to .

If you are taken to the ‘View BACS / Giro Details’ screen, go to .

Step 24

If a ‘PMF Payment Reference’ is shown

  • the payment has been issued
  • enter the total amount of the payment (net amount and any amount recovered) in the appropriate ‘WTC’ or ‘CTC’ column
  • add up the total amounts of WTC and CTC that have been paid
  • enter the amounts in the ‘WTC paid direct’ and ‘CTC paid direct’ boxes in the ‘System payment up to today’s date table’ at section 3 of the Calculation sheet
  • go to .

If no ‘PMF Payment Reference’ is shown, go to .

Step 25

Check the ‘View Direct Payment Schedule’ screen for any payments

  • with a date in the ‘Due Date’ column that is after today’s date

and

  • on or before the ‘Date of the next HH pay day’ which you have recorded in the ‘Entitlement to next HH pay day table’ at section 3 of the Calculation sheet

for how to do this, use TCM1000312

  • for each payment make a note of the

    • amounts
    • issue dates
  • select ‘Postings’. You will be taken to the ‘View Award Period Postings’ screen
  • compare the amounts with postings of the same amount to identify whether the payments are for WTC or CTC
  • record the total amount of WTC paid direct and CTC in the ‘Still to be paid up to date’ table at section 3 of the Calculation sheet
  • go to .

Step 26

Note: Manual payments that have been posted to the household account, and therefore shown in the ‘View Award Period Postings’ screen are included in the amount shown in the ‘Direct payment made up to today’ field in the ‘View Award Period Summary’ screen.

Check for any manual payments. For how to do this, use TCM1000495

  • go to .

Step 27

Determine the amount to be paid after the next household pay day. For how to do this, use TCM1000496.

If the amount is negative

  • the customer has already received more than their entitlement
  • there is no entitlement to a payment adjustment, and no manual payments will be made
  • print off the Calculation sheet and attach it to the case papers
  • take no further action.

If the amount is positive, go to .

Step 28

Use function ‘User Requested Payment’ to determine if a manual payment can be made using this function. For how to do this, use TCM1000489

Note: To use this function a payment schedule must be present. Therefore the function can not be used for the following manual payment reasons

  • awaiting award (pre-award claims)
  • award issued but no current year schedule set up
  • no trace
  • ‘RLS’ or address on the tax credits computer is incorrect
  • incorrectly ended cases where entitlement has ended incorrectly in error but the customer still has ongoing entitlement to tax credits

and

  • ‘URP’s can only be made where there is, or has been an award and an account created for the household for the tax credit period the payment is being created for.
  • consider the above criteria

Note: The preferred payment method for R92TC is by Payable Order if the customer has a bank or Building Society account. Payable Orders can’t be paid into a POca. If the customer has a POca payment must be made by cashcheque.

If payments can be made by function ‘User Requested Payment’, go to .

If payments can not be made by function ‘User Requested Payment’, go to .

Step 29

Determine if the ‘URP’ can be paid by Bacs. Follow the guidance in TCM0220110.

If the ‘URP’ can be paid by Bacs

  • make a note to pay the full amount in one payment by URP by Bacs
  • go to .

If the ‘URP’ can not be paid by Bacs

  • make a note to pay the ‘URP’ by cashcheque
  • go to .

Step 30

Request payment by R92TC and determine if payment can be made by Payable Order.

  • check if account details are held for the payment recipient. For how to do this, use TCM1000502.

 Note: Payable Orders can not be paid into a POca.

If account details are held for the payment recipient, go to .

If account details are not held for the payment recipient, go to .

If POca details are held for the payment recipient, go to .

Step 31

Check Household Notes, selecting the ‘Payments’ category to check if there are any messages stating the customer is unable to use the account. For how to do this, use TCM1000067.

If there are messages stating the customer is unable to use the account, go to .

If there are no messages stating the customer is unable to use the account

  • make a note to pay R92TC by Payable Order
  • go to .

Step 32

Contact the customer to obtain new account details. Follow the guidance in TCM0094080.

If the customer provides new account details

  • enter the customer’s correct account details. Follow the guidance in TCM0046020.
  • make a note to pay R92TC by Payable Order
  • go to .

If the customer can not provide new account details, go to .

Step 33

If the claim is from a single customer

  • make a note to pay R92TC by cashcheque

Note: Cashcheques can not be requested for amounts less than the minimum direct one-off payment amount of £1 or greater than the maximum limit of £350 for each cashcheque. Payments must be split into amounts within these parameters to total the required full payment.

  • go to .

If the claim is a joint claim, go to

Step 34

If account details are held in the partner’s name

  • tell the customer we will make the payment into their partner’s account
  • go to .

If account details are not held in the partner’s name

  • make a note to pay R92TC by cashcheque

Note: Cashcheques can not be requested for amounts less than the minimum direct one-off payment amount of £1 or greater than the maximum limit of £350 for each cashcheque. Payments must be split into amounts within these parameters to total the required full payment.

  • go to .

Step 35

Calculate and schedule the manual payments. For how to do this, use TCM1000491

  • prepare the appropriate letter for sending to the customer

Note: The letter should be addressed to the customer who made contact with us.

  • pass the papers to the appropriate manager for checking

then, when the case has been checked and any errors corrected

  • issue the letter to the customer
  • send the ‘Schedule of Payments’ to the Database Team

Note: Any priority action that is required must be included in any instruction to the Database Team.

  • take no further action.

Step 36

When the one day BF date has expired, go to the ‘View Award Period Summary’ screen for the current year (CY) award to check if payment is being made by the tax credits computer. For how to do this, use TCM1000487.

If you are taken to the ‘View Award Period Postings’ screen

  • payment is being made by the tax credits computer
  • update Household Notes with the message PC03 from TCM0168020. For how to do this, use TCM1000001
  • go to .

If the message ‘No postings to display’ displays

  • payment is not being made by the tax credits computer
  • go to .

Step 37

If you have attempted to lift a payment suspension and payment is still not being made by the tax credits computer, go to .

If you have not attempted to lift a payment suspension, go to .

If you have attempted to lift a payment suspension and payment is now being made by the tax credits computer

  • update Household Notes with the message PC03 from TCM0168020. For how to do this, use TCM1000001
  • go to .

Step 38

If the payment suspension does not prevent a manual payment being made, go to .

If the payment suspension does prevent a manual payment being made, go to .

Step 39

Use function ‘Maintain Payment Suspension’ to check if a payment suspension has been set. For how to do this, use TCM1000368.

Note: Check if there is a payment suspension reason for customer 1 and customer 2, where applicable.

If a payment suspension has been set and the reason is ‘PXCS Error - Do Not Remove’

  • update Household Notes with the appropriate message, either PC17 for new referrals or PC18 for recalculation cases from TCM0168020. For how to do this, use TCM1000001
  • contact the Maintain Database Team for them to clear the case on the database
  • go back to .

If a payment suspension has been set and the reason is anything else, go to .

If a payment suspension has not been set, go to .

Step 40

Use function ‘View Household Notes’ to check for an entry relating to the reason for the payment suspension. For how to do this, use TCM1000067.

If there is no entry explaining the reason for the payment suspension, go to .

If there is an entry explaining the reason for the payment suspension, go to .

Step 41

Determine why the claim has fallen out of system payment and check if it can be returned to system payment. To do this

  • use function ‘View Household Account’ to identify the reason why the claim has fallen out of system payment. For how to do this, use TCM1000487
  • check the ‘Known Error Log’ (KEL)

or

  • refer the case to your TALLO to check if a workaround or corrective action is available.

If a workaround or corrective action is available, go to .

If a workaround or corrective action is not available, go to .

Step 42

If the case has progressed to award

  • use function ‘View Household Notes’ to check if any manual payments have been made. For how to do this, use TCM1000067
  • go to .

If the case has not progressed to award, go to .

Step 43

If manual payments have been made, go to .

If manual payments have not been made, go to .

Step 44

Check for the message PP07 to confirm which years may have already been checked for manual payment postings.

If you find the above message, go to .

If you can not find the above message

then

  • go to .

Step 45

Carry out the workaround or corrective action as detailed in the ‘KEL’ or advised by your TALLO

  • set a clerical BF date for one day in the future
  • update Household Notes with the message PC20 from TCM0168020. For how to do this, use TCM1000001
  • take no further action.

Step 46

Use function ‘View Household Notes’ and ‘View Household Account’ to check what payments have already been made on the latest award. For how to do this, use TCM1000067 and TCM1000486

  • go to .

Step 47

Use function ‘View Household Notes’ to check for payments made but not posted to the correct year. For how to do this, use TCM1000067

  • select the previous tax year from the ‘Select Tax Year’ field
  • compare the manual cashcheques found on the ‘View Award Period Postings’ screen with the manual payments shown in Household s.

If payments have been posted

  • go to .

If a payment has not been posted

  • make a note of the payment details
  • check if the payment have been incorrectly posted in any other award period and record the amount
  • check ‘Household Notes’ for any change of circumstance messages that have not been updated on the tax credits computer and make a note of them
  • go to .

Step 48

Use function ‘View Household Notes’ to check for any retained messages that request that manual payments should not be made. For how to do this, use TCM1000067.

If no message is present and you have noted all the payment details, go back to .

If a message is present

  • take no further action.

Step 49

Set a clerical BF date on the referral and any related case papers for two months in the future

then, when the BF date has expired

  • send the case papers to storage. Follow the guidance in TCM0074140.