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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
, see all updates

Payment - overpayments (A-C): overpayments - calculate and remit (cases suspended on or after 30/10/06) (AG)

To investigate a Disputed Overpayment and identify if HM Revenue & Customs (HMRC) and the customer have met their responsibilities, consider steps 1 to 60.

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

Use Function MAINTAIN HOUSEHOLD NOTES to record a message stating you are taking responsibility for the case

  • If there is already a message stating somebody else is dealing with the case, pass all the paperwork with a completed form TC648 to the person involved. Take no further action.
  • If there is a message stating

    ‘OD04 - *\*DOP**Further corre received disputing overpayment, corre passed to group ‘xx’ to be linked with original dispute corre’

    or

    ‘OD03 - *\*DOP** Further corre received disputing overpayment, linked with original dispute corre. Database ID number xxxx

    then

  • If there is no message

    • select the ‘Debt Recovery’ category to record the following

    ‘TCMZ *DOP* Under enquiry possible remission on Group XX. Date DD/MM/YY’

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

    • complete an Overpayments worksheet (Word 40KB) with the

    • customer’s name
    • customer’s NINO
  • complete an Overpayment calculation sheet (Excel 44.5KB) with the

    • customer’s name
    • customer’s NINO
    • the amount of WTC and/or CTC overpayment on the computer

    then

    • calculate the overpayment

Note: To correctly identify debts that belong to the tax year you are looking at do not include any cross award transfers

  • check if cross award recovery has taken place and debts have been transferred to the year in dispute. For how to do this follow the How To TCM1000561
  • if you identify that cross award recoveries have been added to the disputed year you will need to use calculation 3.

Calculation 1 - Check if the overpayment falls into the £100 or less category, is a minus figure, or a nil amount.

To calculate this, use Function VIEW HOUSEHOLD ACCOUNT and go to the View Award Period Summary screen. For each tax credit, add together the amounts in the

  • Overpayment Outstanding field
  • Recovered from Other Awards field

and

  • Adjustments and Payment In field

then deduct

  • any amount in the Recovered from this Award field
  • any previous adjustment that HMRC made to reduce the overpayment
  • and
  • any adjustment due to the four-week run-on

Note: You will need to check Household Notes for any information about the payments made for the four-week run-on. The four-week run-on adjustment notes can be identified by the prefix ‘OW34’, ‘OW35’ or ‘OW36’.

  • the amount left is the amount that should be recorded on the ‘Overpayment calculation sheet’

Note: You must not print off the ‘Overpayment calculation sheet’ until you have completed all the boxes. This is because the sheet contains calculations that will have to be undertaken manually if the sheet is printed.

* If the total amount of overpayment is

* £100.00 or less

and

* for tax year 2005-2006 or a later year

and

* the award is finalised

then

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* If the total amount of overpayment is a minus figure or a nil amount, disregard this figure and use Calculation 2.

Calculation 2

To calculate this, use Function VIEW HOUSEHOLD ACCOUNT and go to the View Award Period Summary screen. For each tax credit, add together the

  • amounts in the Direct payments made to date
  • PVE payments authorised to date

and

  • the amount recovered from the award fields

then deduct

  • the amount in the Award Entitlement field
  • any adjustment due to the four-week run-on

Note: You will need to check Household Notes for any information about the payments made for the four-week run-on. The four-week run-on adjustment notes can be identified by the prefix ‘OW34’, ‘OW35’ or ‘OW36’.

  • the amount left is the amount that should be recorded on the ‘Overpayment calculation sheet’

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then

  • If you have received a referral form or letter from

    • Debt Management Banking (DMB), through Taxpost Direct where the customer questions direct recovery of an overpayment, go to Step 2.
    • the customer in writing (a letter or form TC846) disputing the overpayment, go to Step 2.
    • the customer in writing requesting a review of the disputed overpayment (DOP) decision. Follow the guidance in TCM0230180.
    • the customer in writing, returning a completed form TC909, go to Step 18.
    • a Contact Centre (CC) on a WAM referral, go to Step 3.
    • Compliance, through Taxpost Direct and they have determined that there is no action for them to take on the claim, go to Step 3.
    • a customer requesting an explanation of the overpayment, go to Step 2.
    • Note: If the customer is disputing the overpayment and they state they have been declared bankrupt or sequestrated, work the dispute first.

Calculation 3

To calculate this, use Function VIEW HOUSEHOLD ACCOUNT and go to the View Award Summary screen. For each tax credit award, add together the

  • amounts in the Direct Payments made to date
  • PVE payments authorised to date
  • amount recovered from this award field

then deduct

  • the amount of the Cross Award transfer to this award
  • the amount of the Cross Award transfer from this award
  • the amount in the Award Entitlement field
  • adjustment due to the four-week run-on

Note: you will need to check Household Notes for any information about the payments made for the four-week run-on. The four-week run-on adjustment notes can be identified by the prefix OW34, OW35 or OW36.

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Step 2

If the referral form or letter

  • states that the customer requires an explanation of the overpayment. Follow the guidance in TCM0226240.
  • does not state the customer requires an explanation, go to Step 3.

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Step 3

Use Function MAINTAIN HOUSEHOLD NOTES to check if the following has been entered

‘TCMZ Explanation of O/P given over the telephone to Clmt 1/Clmt 2. O/P is on single*/joint* household for tax year 03-04*/ 04-05*/ 05-06*/ 06-07*. O/P reason is due to Compliance*/ Contra Error*/ Manual Payment*/ Incorrect Data Entry*/ Change of Circumstances*/ Renewal Termination*/ Misadvice*/ System Error (please specify)*/ PVE* (*delete as appropriate)’

  • If the message has not been entered, go to Step 4.
  • If the message has been entered, go to Step 38.

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Step 4

Use Function VIEW HOUSEHOLD ACCOUNT

  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You will be taken to the Select Award screen
  • look at the relevant award period (refer to the first note) and make a note of

    • the award periods on the ‘Overpayment calculation sheet’ and ‘Overpayments worksheet’ (refer to the second note)
    • the status of the awards on the ‘Overpayments worksheet’ in the notes box

Note: The correspondence you have from the customer should help you to determine the award periods they are disputing

Note: You must not print off the ‘Overpayment calculation sheet’ until you have completed all the boxes. This is because the sheet contains calculations that will have to be undertaken manually if the sheet is printed.

then

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Step 5

From the correspondence, establish why the customer states the overpayment is incorrect

Note: By following the remaining steps in this guidance, you must decide

* the reason for the overpayment
* whether or not the overpayment was caused by HMRC error. Follow the guidance in TCM0228120 and TCM0224280.

Note: If, whilst determining the reason for the overpayment, you establish that an entry in Function MAINTAIN HOUSEHOLD NOTES has been made on the wrong award, you must transfer the note to the correct award and then delete it from the incorrect one.

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Step 6

Use Function MAINTAIN HOUSEHOLD NOTES to check for the following entry that will indicate the case is an Isle of Man or Channel Islands case

‘IM08 - IoM / CI check. TC980 issued to customer and O/P for CY remitted where appropriate’

  • If the entry is there, go to Step 40.
  • If the entry is not there, go to Step 7.

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Step 7

Use Function MAINTAIN HOUSEHOLD NOTES to check for the following entry that will indicate the case is a cross border one

‘TCMZ Cross Border - Family Supplement Case. European Economic Area Team - EEA IN (MU290697)’

then

  • If the entry is there, pass the case and all the relevant paperwork to the International Team. Take no further action.

Note: Your manager will provide you with these details.

  • If the entry is not there, go to Step 8.

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Step 8

Check the statement made by the customer in their letter or on form TC846 to establish if the customer states they made a phone call regarding their overpayment

  • If the customer has not mentioned having made any phone calls, go to Step 9.
  • If the customer has mentioned having made phone calls

    • refer the case for retrieval of all the phone calls necessary to fully investigate the customer’s enquiry
    • BF the case until the call transcripts are received

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    • If, after reviewing the call transcripts, you establish that the phone calls do not relate to the reason for the overpayment, make a note of this on the ‘Overpayments worksheet’ and go to Step 9.
    • If, after reviewing the call transcripts, you establish that the phone calls may relate to the reason for the overpayment, make a note of this on the ‘Overpayments worksheet’ and go to Step 9.

    Note: If, after considering the call transcripts, you feel the customer received incorrect advice, make a note of this on the ‘Overpayments worksheet’ and consider the incorrect advice later in this guidance.

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Step 9

Check if the overpayment was caused by a contra error

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  • use Function VIEW HOUSEHOLD NOTES to check all entries for either of the following messages

‘TCMZ AP1 / 2 Accounting correction for event BPO BACS overpayment xx.xx.xx, xx.xx.xx £xxx.xx TC855A issued on xx/xx/xxxx Recon’

‘TCMZ Posting Correction xx/xx/xx’

* If either of these messages is shown, the overpayment was caused by a contra error. Make a note of the monetary amounts listed in the message on the ‘Overpayments worksheet’ as an overpayment caused by contra errors and then go to [Step 10](#IDAJ5XPB).
* If neither message is shown

* select [Cancel]. You will be taken to the View Overpayment screen
* select [Household Account]. You will be taken to the View Award Period Summary screen
* select [Schedule] to check the payment schedule for any duplicate entries for the same week

then

* If there are no duplicate entries, the overpayment was not caused by a contra error, go to [Step 10](#IDAJ5XPB).
* If there are any duplicate entries, the overpayment was caused by a contra error, make a note on the ‘Overpayments worksheet’ and then go to [Step 10](#IDAJ5XPB).

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Step 10

Check if the overpayment was caused by a manual payment

  • the following payments must be noted on the ‘Overpayments worksheet’

    • Hardship Top-Ups made after 01/01/2004
    • any PVE Underpayments
    • any Additional Tax Credits Payments (ATCP)
    • any manual payment issued by an Enquiry Centre or TCO on or after 01/01/2004

then

  • select [Household Notes] to check if there is an entry of a manual payment being requested and the date it was authorised

    • If there are no manual payments recorded

    • select [Cancel]. You will be taken back to the View Overpayment screen

    then

    • go to Step 11.

    • If there are manual payments recorded

    • make a note on the ‘Overpayments worksheet’ of the dates and the amounts of the payments
    • select [Cancel]. You will be taken back to the View Overpayment screen

    then

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Step 11

Use Function VIEW HOUSEHOLD ACCOUNT

  • go to the View Award Period Posting screen
  • check for any manual payments. Follow the guidance in TCM0220180

Note: Manual payments can be identified as MGPW for WTC payments, MGPC for CTC payments or MGPM for combined CTC and WTC payments.

* If there are no manual payments, go to [Step 13](#IDAXHYPB).
* If there are any manual payments, make a note on the ‘Overpayments worksheet’ of the date when it was issued and posted and the amounts of WTC and CTC, go to [Step 12](#IDAOEYPB).

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Step 12

Compare the dates of issue and posting

Note: This will help you determine if there has been a delay of more than 30 days in posting the manual payment (that is, the number of days between the issue date of the manual payment and it being posted).

  • If the issue date and the posting date of the manual payment are the same

    • pass the case to your Technical Advice Line Liaison Officer (TALLO)
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  • If the overpayment was caused by a manual payment issued prior to 01/01/2004 but there was a delay of no more than 30 days from the issue date to the date the manual payment was posted

    • the overpayment was not caused by HMRC failing to meet one of their responsibilities
    • go to Step 13.
  • If the overpayment was caused by a manual payment issued prior to 01/01/2004 but there was a delay of more than 30 days from the issue date to the date the manual payment was posted

    • the overpayment was caused by HMRC failing to meet one of their responsibilities
    • make a note of this on the ‘Overpayments worksheet’
    • go to Step 13.

Note: If during the course of your investigation you identify that any cashcheques have been posted to the wrong year or wrong account, follow the guidance in TCM0224160.

Note: Any manual payments issued by an Enquiry Centre on or after 01/01/2004 are fully recoverable because, from that date, the customer signed a declaration telling them that the payment may cause an overpayment. You will be able to spot these by checking for entries in Function MAINTAIN HOUSEHOLD NOTES regarding payments from an Enquiry Centre.

Note: Any manual payments issued by TCO on or after 01/01/2004 are fully recoverable because from that date the customer was sent a letter telling them that the payment may cause an overpayment. You will be able to spot these by checking for entries in Function MAINTAIN HOUSEHOLD NOTES regarding payments from TCO.

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Step 13

Check if a backdating payment caused the overpayment.

Use Function VIEW HOUSEHOLD NOTES to check if there is an entry of a backdating payment being requested and the date it was authorised

  • If there is no backdating payment recorded, go to Step 15.
  • If there is a backdating payment recorded

    • make a note on the ‘Overpayments worksheet’ of the date and the amount of the payment

    then

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Step 14

Use Function VIEW HOUSEHOLD ACCOUNT

  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You will be taken to the Select Award screen
  • select the relevant award period noted on the ‘Overpayments worksheet’
  • select [OK]. You will be taken to the View Award Period Summary screen
  • select [Postings]. You will be taken to the View Award Period Posting screen
  • check for any manual payments that match the backdating payment you noted at Step 12. These can be identified as

    • ‘MGPW’ for WTC payments
    • ‘MGPC’ for CTC payments
    • ‘MGPM’ for combined CTC/WTC payments

    • If there are no manual payments that match the backdating payment you noted at Step 13, go to Step 15.
    • If there are any manual payments that match the backdating payment you noted at Step 13, make a note on the ‘Overpayments worksheet’ of the date when it was done and the amounts of WTC and CTC and then go to Step 15.

    Note: Backdating payments should not be posted to the computer and are therefore always due to HMRC failing to meet one of their responsibilities. They are always non-recoverable.

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Step 15

Check the referral or letter to determine if there’s any indication that the overpayment on the claim was caused by incorrect data being entered onto the computer or by the incorrect scanning of information during the capture or renewal of the claim

then

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Step 16

Use Function VIEW AWARD to check for discrepancies between the awards

  • enter the customer’s NINO in the Key Entry Data screen
  • select the Period checkbox
  • enter ‘06-04-xxxx - 05-04-xxxx’ in the Period field for the award period
  • select [OK]. You will be taken to the Select Award screen
  • select the first version of the relevant award
  • select [OK]. You will be taken to the Award Summary screen
  • make a note of the following on the Award version information form (Word 23KB)

    • date notice issued
    • WTC award amount
    • CTC award amount
  • select [Applicant Details]. You will be taken to the Applicant and Household Income Details screen
  • make a note of the following on the ‘Award version information form’ for both customers

    • hours worked
    • income declared

    Note: You can find this information in the Applicant 1 and Applicant 2 boxes.

  • select [Qualifying Details]. The Qualifying Details screen will display
  • make a note of the following on the ‘Award version information form’ for both customers

    • any qualifying details (other than hours and income)
  • select [Qualifying Children], if available. The Qualifying Children and Young People screen will display
  • make a note of the following on the ‘Award version information form’ for both customers

    • number of children
    • ages of children
    • number of disabled children
    • number of disabled children receiving the Highest Care Component of DLA
    • number of children in approved childcare
    • approved childcare costs
  • return to the Award Summary screen
  • select [View Calculation]. You will be taken to the View Calculation screen
  • select [View Elements]. You will be taken to the View Elements screen
  • make a note of the date in the Ent Per End column and the days each Element was paid in the No. Paid column on the ‘Award version information form’

Note: Where childcare has been claimed on an award, you will also need to select [View Childcare] as well to obtain the correct details.

  • cancel out of this award and select the next version of the award. Continue to note all the details of each version of the award on the ‘Award version information form’

then

  • compare the details of each version

Note: Establish if HMRC and the customer have met their responsibilities. Follow the guidance in TCM0224280.

Example 1: The details of four children instead of two have been captured. In this example, the customer would have received an award notice with the incorrect details and higher payments than expected. The customer must inform HMRC promptly if any details are not recorded correctly

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Note: For cases where the customer disputes an overpayment arising in tax year 2008-2009 or a subsequent year, the customer must inform HMRC within 30 days if any details are not recorded.

* If you decide that the overpayment was not caused by incorrect data entry, go to [Step 17](#IDARWYPB).
* If you decide that the overpayment was caused by incorrect data entry, make a note of this on the ‘Overpayments worksheet’ and then go to [Step 17](#IDARWYPB).

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Step 17

Consider whether a change of circumstances has been incorrectly applied and caused the overpayment

  • use Function VIEW AWARD
  • enter the customer’s NINO in the Key Entry Data screen
  • select the Period checkbox
  • enter ‘06-04-xxxx - 05-04-xxxx’ in the Period field for the award period
  • select the latest version of the relevant award
  • select ‘Navigation’ on the toolbar menu
  • select ‘View Application’ from the options available. You will be taken to the Application Summary screen in Function VIEW APPLICATION
  • the ‘Claim Version’ that created the award will be displayed
  • select [VH]. You will be taken to the View Application History screen
  • go to the Applicant 1 screen
  • select [Versions]. You will be taken to the Select Application Version screen
  • establish whether the latest claim version is correct. To do this

    • record the date of the latest claim version on the Application history information form (Word 21KB)
    • select the latest claim version
    • select [OK]
    • select ‘History’ on the toolbar menu
    • proceed to check all of the signals history for customer 1, customer 2 and any children, if appropriate and make a note of all the details on the ‘Application history information form’

Note: You are looking for overlapping history for any of the signals and/or a gap in history of less than seven days in work history. For example: if the following information was available in the History for Hours worked

Start date Include from End date Hours
       
14/09/2002 06/04/2003 02/07/2003 35
14/09/2002 06/04/2003 30/04/2003 35

this would indicate the history has overlapped and requires correction, as the customer has two sets of hours that both cover the period 06/04/2003 to 30/04/2003.

or

Start date Include from End date Hours
       
02/05/2003 02/05/2003 02/07/2003 35
14/09/2002 06/04/2003 30/04/2003 35

this would indicate a gap of less than seven days in the work history that would need to be corrected.

Note: Some dates may have been populated by the computer - for example, the Include From field could have been populated three months before the date the change was actually made on the computer. You can check this by checking the award version date.

then

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Step 18

Check the previous claims to confirm the change of circumstances that have been applied. In the Application History screen

  • select [Versions]. You will be taken to the Select Application Version screen
  • record the date of the previous claim version on the ‘Application history information form’
  • select the previous claim version
  • select [OK]
  • select ‘History’ on the toolbar menu
  • proceed to check all of the signals history for customer 1, customer 2 and any children, if appropriate and make a note of all the details on the ‘Application history information form’
  • repeat the above process until you have checked the history for all versions of the claim, including the initial version

then

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Step 19

Using the information on the referral, letter and the ‘Overpayments worksheet’, establish whether a change of circumstances was incorrectly applied

Note: If, for example, the customer told us they had a new baby that was born on 30/04/06 and they contacted us to inform us of the change, but we entered the date of birth as 03/07/06, the change of circumstances was incorrectly applied.

  • If the change of circumstances was correctly applied, go to Step 21.
  • If the change of circumstances was incorrectly applied but it has since been corrected

    • note the details on the ‘Overpayments worksheet’

    then

  • If the change of circumstances was incorrectly applied and the details are still incorrect, note the details on the ‘Overpayments worksheet’, then

    • If the year you are working is PY-5 or earlier, go to Step 20.
    • If the year you are working is PY-4 or later, go to Step 36.

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Step 20

Use the SEES Tax Credits Entitlement Calculator to determine the amount the customer was entitled to for the PY-5 or earlier year. To access the SEES calculator

  • in Microsoft (MS) Excel
  • select ‘SEES’ on the toolbar menu
  • select ‘Tax Credits Entitlement Calculator’ from the options available
  • to locate the guidance on how to calculate the WTC and/or CTC entitlement using the SEES calculator on the intranet, access the Benefits & Credits homepage

    • select ‘T’ from the ‘A-Z’ list on the left hand side of the screen
    • select the ‘Tax Credits Roadmap’
    • select ‘SEES’ from the left hand side of the screen
    • select the relevant instructions required to help you carry out the calculation

then

  • on the first page enter the customer’s name and the relevant tax year
  • select ‘Enter Details of Elements Awarded’
  • complete all the blue input fields, starting with the Date Claim Submitted. You will need to complete each blue input field with the customer (and, if applicable, their partner’s details)
  • you can create entitlement periods here by selecting ‘Add CoCs’ (Add change of circumstances) and entering the effective date of the change. You will need to complete each blue input field with the customer (and, if applicable, their partner’s details)

Note: When adding a change of circumstance, consider corresponding changes in income, 30 hour premium, 50 plus, entitlement to WTC (16 or 30 hours weekly) and, where necessary, follow the relevant Changes guidance.

Note: From 06-04-12 the 50 plus element will no longer be paid.

  • select [Calc] to view the calculation of the award
  • the Calculation screen will show you the breakdown of the award, including the taper points and the daily rate for each tax credit
  • print off the calculation

then

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Step 21

Consider whether a delay in processing a change of circumstances (TCM0322180 refers) has caused the overpayment

  • use Function MAINTAIN HOUSEHOLD NOTES to check if there is an entry relating to a change of circumstances being reported and being applied late

    • If there is an entry, make a note of the date on the ‘Overpayments worksheet’ and then go to Step 24.
    • If there is no entry, go to Step 22.

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Step 22

To find out when the change of circumstances was applied

  • use Function VIEW APPLICATION
  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You’ll be taken to the Select Application Version screen
  • make a note of the date in the Received Date field that is after the date the change of circumstances should have been applied

Note: This will give you the date when the change of circumstances was processed.

then

  • check the customer’s statement on form TC846 or the letter to determine if they have provided the date they reported the change of circumstances

    • If the customer has not provided a date, go to Step 23.
    • If the customer has provided a date, go to Step 24.

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Step 23

Phone the customer for the details of the date they reported a change of circumstances. Follow the guidance in TCM0094080.

  • If you are able to contact the customer by phone and obtain the information, go to Step 25.
  • If you are unable to contact the customer by phone

    • issue form TC909 (Word 329KB) to request the information you need
    • BF the case in your BF run for 14 days
    • use Function MAINTAIN HOUSEHOLD NOTES and select the ‘Debt Recovery’ category and record the following

    ‘TCMZ ** DOP**UTC TC909 issued on XX/XX/XX by XXXXX (Officers name). Grp XX/XX’

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

    then

    • If you receive a reply within the 14-day BF period, go to Step 24.
    • If you have not received a reply within the 14-day BF period

    • send a manual reminder form TC609
    • BF the case in your BF run for a further 14 days
    • use Function MAINTAIN HOUSEHOLD NOTES to record the issue of the manual reminder form TC609

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

    Note: If you have not received a reply 14 days after the issue of a reminder, attempt to contact the customer by phone one more time to obtain the information you need. Follow the guidance in TCM0094080. Then, whether you receive the information or not, go to Step 24.

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Step 24

If you

  • have obtained the information you need

    • use Function MAINTAIN HOUSEHOLD NOTES to check the date when the customer reported the change of circumstances to TCO
    • make a note of the following on the ‘Overpayments worksheet’ in the notes box

    • any other entries relating to the change of circumstances stating that the customer has contacted TCO again
    • any entries relating to TCO not taking any action to process the change

    then

    • If you can establish that it took more than 30 days from the date the customer reported the change of circumstances to the change being processed, HMRC has failed to meet one of their responsibilities. Make a note of this on the ‘Overpayments worksheet’ and then go to Step 25.
    • If the overpayment was not caused by applying the change of circumstances late, go to Step 25.
  • have not obtained the information you need to confirm that it took more than 30 days from the date the customer reported the change of circumstances

    • make a note of this on the ‘Overpayments worksheet’

    then

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Step 25

Determine if the claim is a temporary reference number case

Use Function MAINTAIN HOUSEHOLD NOTES to check if one of the following messages have been entered

‘TCMZ FTA x 2 ceased’

‘TCMZ Failed to attend NINO interview’.

  • If there is an entry, check if the overpayment

    • has occurred because the payment was made under a temporary reference number and the customer failed to attend the identification interview. The overpayment was not caused by an HMRC error and will always be recoverable, go to Step 39.

    Note: The customer is required to attend an identification interview before a NINO can be allocated.

    • has occurred because the payment was made under a temporary reference number and the customer attended the identification interview but was not given a NINO. The overpayment was caused by HMRC failing to meet one of their responsibilities. Make a note of this on the ‘Overpayments worksheet’ and then go to Step 40.
  • If there is no entry, the overpayment was not caused by the customer not having a NINO, go to Step 26.

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Step 26

Check if the overpayment is due to the termination of the claim as a result of renewal processing

  • use Function VIEW S17 DETAILS
  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]

    • If you are taken to the Select S17 Household screen, select the household that the overpayment is being disputed on and then select [OK]. You will be taken to the Select S17 Period screen

    Note: Use the information in the correspondence, including the date it was received to help you decide which household to select. Where a customer is disputing the termination of their provisional payments, the household start date will be before the tax year the provisional payments were made for.

    • If you are taken straight to the Select S17 Period screen, select the finalised award that has caused the dispute and then select [OK]

    Note: Use the information in the correspondence, including the date it was received to help you decide which award the customer is disputing. If the customer is disputing the termination of their provisional payments, select the finalised award for the period directly before the tax year the provisional payments were paid for.

then

  • check if the Terminated signal is set

Note: If a signal is set, the Signals screen will automatically display.

* If the signal is set, go to [Step 29](#IDAA4ZPB).
* If the signal is not set, go to [Step 27](#IDAM1ZPB).

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Step 27

In Function VIEW S17 DETAILS, go to the Current Position screen

  • Does the Status field show ‘No Entitlement’ for the tax year following the award that has been finalised?

Note: The Status field is found on the left-hand side of the screen about half way down. Do not use the Status shown in the Declarations box.

* yes, the claim has not been terminated as part of renewals processing, go to [Step 30](#IDAEE2QB).
* no, go to [Step 28](#IDA12ZPB).

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Step 28

Use Function VIEW AWARD and go the Select Award screen

  • check if any of the award versions for the claim you’re working are ‘Statement of Account’ (SOA)

    • If one or more of the award versions are SOA, go to Step 29.
    • If there no SOA award version, the claim has not been terminated as part of renewals processing, go to Step 30.

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Step 29

Use Function VIEW S17 DETAILS and go to the Current Position screen to check the status of the claim. Does the Status field show ‘Terminated Compliance’?

Note: The Status field is found on the left-hand side of the screen about halfway down. Do not use the Status shown in the Declarations box.

  • yes, make a note on the ‘Overpayments worksheet’ then use Function VIEW HOUSEHOLD NOTES to check if there are any entries that confirm that the claim was ‘Compliance Terminated’

    • If there are no entries in Household Notes and you noted that the Status field showed the case was ‘Terminated Compliance’, refer the case to your Technical Advice Line Liaison Officer (TALLO) for them to check the case
    • If there are entries in Household Notes and you noted that the Status field showed the case was ‘Terminated Compliance’, contact the Compliance Team who will tell you whether you can proceed with the DOP process

    • If they tell you that you can continue with the DOP process, go to Step 30.

    Note: This action will be managed locally and your manager will be able to give you details of any BF arrangements that may be required

    • If they tell you that you cannot continue with the DOP process
    • complete the stencil Disputed overpayment - compliance involvement (Word 52KB)
    • send the stencil, with all the relevant paperwork by Taxpost Direct (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

    then

    • wait for a reply
  • no, the claim may have been terminated as a result of renewals processing. Follow the guidance in TCM0264180.

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    • If the claim is eligible for restore and is PY or later, follow the guidance in TCM0262260

then

* If the claim cannot be restored

* complete the TALLO referral and pass the claim to your Technical Advice Line Liaison Officer
* your TALLO will hold the case to obtain further advice

* If the claim can be restored BF the case for one week until the restore goes through and note on ‘Overpayments worksheet’

* If the claim has been restored, go to [Step 57](#IDAMYCQB).
* If the claim has not been restored after one week, BF for a further week and then check again

* If the claim does not require a restore, go to [Step 30](#IDAEE2QB).

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Step 30

Check the statement made by the customer in their letter or on the form TC846 to establish if the customer states they were given incorrect advice

Note: Before continuing with this guidance, you must ensure that you have details of what the misadvice was, who gave it, and, on what date. Contact the customer if necessary to clarify.

  • If the customer does not state they received incorrect advice, go to Step 32.
  • If the customer states they were given misadvice

    • use Function VIEW AWARD to calculate the amount of the overpayment due to misadvice
    • go to the Select Award screen and select the award version affected by the incorrect advice
    • select [OK]. You will be taken to the Award Summary screen
    • make a separate note of the total award amounts for WTC (A) and CTC (A1) on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    • return to the Select Award screen and select the award version in which the information was corrected
    • select [OK]. You will be taken to the Award Summary screen
    • make a separate note of the total award amounts for WTC (B) and CTC (B1) for that award on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    • deduct the correct award amounts of WTC (B) and CTC (B1) from the incorrect award amounts for WTC (A) and CTC (A1)
    • divide the separate figures for WTC and/or CTC by the number of days in the award period

    Note: There are a maximum of 366 days in the award periods for the years 2003-2004 and 2007-2008.

    Note: If entitlement starts or finishes part way through the tax year, the award period would start or finish from the date the entitlement does.

    Note: To establish the number of days in the award period, go to the View Elements screen in Function VIEW AWARD. The number of days in the ward period will be displayed underneath the Days column.

    Note: To check the entitlement period, check the Period covered by this notice field on the View Award Summary screen in Function VIEW AWARD.

    • multiply the figures for WTC and/or CTC by the number of days from the award start date to the date the award was corrected

    Note: The number of days should be no more than 365 (366 for 2003-2004 and 2007-2008). If the award was corrected after the end of the award period, you must only calculate the number of days to the end of the award period. Make a separate note of the amount of the overpayment for WTC and/or CTC on the ‘Overpayments worksheet’ and the ‘Overpayment calculation sheet’ for each tax credit.

    then

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Step 31

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If the tax year you are working is 2003-2004, 2004-2005 or 2005-2006, and

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    • an Enquiry Centre or TCO use Function VIEW HOUSEHOLD NOTES to check all entries for evidence to confirm that the customer received incorrect advice
    • a Contact Centre, refer the case for retrieval of all the phone calls the customer made to the Contact Centre. BF the case until the call transcripts are received.

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    Note: This call retrieval action is managed locally and your manager will be able to give you details of how to make the referral for the phone call retrieval and how long to BF the case for.

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    • If, after reviewing the entries in Household Notes and/or the phone call transcripts, you consider that the overpayment was not caused by the customer receiving incorrect advice, make a note on the ‘Overpayments worksheet’ and then go to Step 32.
    • If, after reviewing the entries in Household Notes, CMA records and/or the phone call transcripts, you consider that the customer received the wrong advice and that their action in following that advice has caused the overpayment, then HMRC failed to meet their responsibilities. Make a note of this on the ‘Overpayments worksheet’ and then go to Step 32.

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If the tax year you’re working is 2006-2007 or a later year and

  • (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) establish what the misadvice was and who gave it. If the customer states the misadvice was given by

    • an Enquiry Centre or TCO use Function VIEW HOUSEHOLD NOTES to check all entries for evidence to confirm that the customer received incorrect advice
    • a Contact Centre, refer the case for retrieval of all the CMA records. BF the case until the CMA printouts are received
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    • an Enquiry Centre or TCO, use Function VIEW HOUSEHOLD NOTES to check all entries for evidence to confirm that the customer received incorrect advice
    • a Contact Centre, refer the case for retrieval of all the phone calls the customer has made. BF the case until the call transcripts are received

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    Note: This call retrieval action is managed locally and your manager will be able to give you details of how to make the referral for the phone call retrieval and how long to BF the case for.

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    • If, after reviewing the entries in Household Notes and/or the phone call transcripts, you consider that the overpayment was not caused by the customer receiving incorrect advice, make a note on the ‘Overpayments worksheet’ and then go to Step 32.
    • If, after reviewing the entries in Household Notes, CMA records and/or the phone call transcripts, you consider that the customer received the wrong advice and that their action in following that advice has caused the overpayment, then HMRC failed to meet their responsibilities. Make a note of this on the ‘Overpayments worksheet’ and then go to Step 32.

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Step 32

Use Function VIEW HOUSEHOLD NOTES to check if there are any entries that indicate that the case has been affected by an Extended Action Request System (EARS) referral or Vantive.

  • If there is no entry relating to an EARS or Vantive, go to Step 33.
  • If there is an entry relating to an EARS or Vantive, pass the case with the relevant details to your Technical Advice Line Liaison Officer (TALLO) for them to check the case.

    • If the EARS or Vantive relates to the overpayment, your TALLO will hold the case to obtain further advice.
    • If the EARS or Vantive has no impact on the overpayment, go to Step 34.

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Step 33

Use Function MAINTAIN HOUSEHOLD NOTES to check if the following has been entered

‘YP02- PVE Adjustment of £XXX.XX held covering period xx/xx/xxxx to xx/xx/xxxx in tax year xxxx due to overpayment of tax credits by (employer’s name). (Vantive number)’

  • If the message is present, go to Step 35.
  • If the message is not present, go to Step 34.

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Step 34

Use Function VIEW HOUSEHOLD ACCOUNT

  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You will be taken to the Select Award screen
  • select the relevant award
  • select [OK]. You will be taken to the View Award Period Summary screen
  • note the figure in the PVE Authorised to date column
  • select [Schedule]. You will be taken to the View Direct Payments Schedule screen
  • select [View PVE]. You will be taken to the View PVE Payments Schedule screen
  • determine whether any of the dates in the Start Date and End Date fields duplicate or overlap each other

Note: Consider all the liability periods shown, irrespective of whether these are the same or different employers.

Note: Do not consider any period where the Tax Credit Type column shows ‘WTC ADJ’ as this is a legitimate PVE adjustment and not an overlapping or duplicate liability period.

  • determine if the amount in the PVE Authorised up to today field in the View Award Period Summary screen equals that shown in the Amount Authorised column in the View Direct Payment Schedule screen

    • If there are dates that duplicate or overlap, it is likely that the overpayment has been caused by duplicate or overlapping PVE liability periods. Pass the case and all relevant paperwork to your TALLO and then go to Step 58.
    • If the PVE payments in the PVE Authorised up to today field in the View Award Period Summary screen do not add up to the amount in the Amount Authorised column in the View Direct Payment Schedule screen, the overpayment has been caused by PVE payments, go to Step 35.
    • If there are no dates that duplicate or overlap, the overpayment has not been caused by duplicate or overlapping PVE liabilities, go to Step 38.

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Step 35

Send the casepapers and all relevant paperwork in a polylope (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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then

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Step 36

If you have identified that

  • corrective action does not need to be taken, go back to Step 21 to continue your investigation of the overpayment
  • corrective action needs to be taken and you need further information to correct the claim

    • phone the customer for the information. Follow the guidance in TCM0094080
    • If you are unable to contact the customer by phone, issue form TC909 (Word 329KB) and BF the case for 14 days

    • use Function MAINTAIN HOUSEHOLD NOTES and select the ‘Debt Recovery’ category to record the following note

    ‘OD59 *\*DOP**TC909 issued to Clmt 1 / 2 further information required’

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

    • If you have not received a reply within the 14-day BF period, send a manual reminder (form TC609) and BF the case in your BF run for a further 14 days
    • use Function MAINTAIN HOUSEHOLD NOTES to record the issue of the manual reminder (form TC609)

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

  • corrective action needs to be taken and you have all the information you need

    • use Function MAINTAIN OVERPAYMENT and go to the View Overpayment screen
    • select [Maintain Dispute]. You will be taken to the Maintain Dispute screen in function MAINTAIN DISPUTE
    • select the relevant dispute resolution reason from the Dispute Resolution drop down menu
    • select [OK]. This will reinstate overpayment recovery
    • apply the required changes. Follow the relevant Changes guidance, then go to Step 37.

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Step 37

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Step 38

Once you have established cause of the overpayment. Follow the guidance in TCM0224280 to consider if the overpayment is recoverable

  • If the reason for the overpayment was because the customer submitted an incorrect claim due to a genuine mistake and could have reasonably believed their award was correct

For examples of where notional entitlement may or may not be appropriate, use TCM0322470.

  • If you decide the overpayment is recoverable, go to Step 39.
  • If you decide the overpayment is non-recoverable, does this overpayment run in or run on to other years?

For example: has a change of circumstances been applied incorrectly creating an overpayment in more than one year?

* yes, you will need to investigate any overpayment in the other years, go back to [Step 1](#IDAKFBHN).
* no, go to [Step 40](#IDA5F3QB).
  • If you decide the overpayment is partially recoverable, go to Step 39 first and then go to Step 40.

Note: If the reason was one of the following reasons, you will have already noted this on the ‘Overpayments worksheet’. These reasons do not need to be considered under the Code Of Practice 26 (COP 26) Responsibilities as they are always fully recoverable.

* Hardship Top-Ups made on or after 01/01/2004
* any PVE Underpayments
* any Additional Tax Credit Payments (ATCP)
* any manual payment issued by an Enquiry Centre or TCO on or after 01/01/2004.

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Step 39

Make a note on the ‘Overpayments worksheet’

  • that the overpayment is considered to be recoverable

and

  • note the reasons on the ‘Overpayments worksheet’

Note: All cases where HMRC has failed to meet its responsibilities but the overpayment isn’t being remitted because the customer also failed to meet their responsibilities, must be recorded on the relevant Remissions database under the remission type ‘Recoverable Failed Responsibilities’.

then

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Step 40

Make a note on the ‘Overpayments worksheet’

  • that the overpayment is considered to be non-recoverable

and

  • note the reasons

Note: Action will be taken to remit the portion of the overpayment that was due to HMRC failing to meet one of their responsibilities, or the whole of the overpayment, as appropriate.

Note: When carrying out a partial remission, all cases where both HMRC and the customer have failed to meet their responsibilities, the amount that is being recovered must be recorded on the relevant Remissions database under remission type ‘Recoverable Failed Responsibilities’.

For example: the customer has been overpaid £100 caused by Official Error. Of this, £40 is non-recoverable and £60 is recoverable because the customer also failed to meet their responsibilities. You will make a partial remission of £40 and record it as a remission on the database. You would also record the £60 on the database under remission type ‘Recoverable Failed Responsibilities’.

then

Check if there is a Class 16 remission on the tax year you intend to apply changes to, for how to do this use TCM1000027.

Note: A Class 16 remission is applied by Debt Management and Banking (DMB) when a customer has been selected to have their tax credits overpayment recovered by reducing their tax code, this is known as coding out.

If there is no Class 16 remission, go to Step 41

If there is a Class 16 remission,

  • complete the ‘coding out’ stencil tax credits coding out referral
  • send the completed stencil by e-mail to Liverpool DTO, Tax Credits (DMB ) via DL-Coding Out Stencils

Note: Provide as much information as possible in section B of the stencil. Explain clearly why you are making the referral and avoid using terminology which DMB staff may not understand.

  • update Household Notes with the message OC01 from TCM0166020 for how to do this use TCM1000001.
  • BF the claim for 48 hours
  • return to this step after 48 hours

Check if there is still a Class 16 remission on the tax year you intend to apply changes to, for how to do this use TCM1000027.

If the Class 16 remission has been cancelled

  • update household note OC01 to show cancellation has been actioned

Note: The household account should have now converted the ‘adjustment’ back into an ‘outstanding overpayment’ of the same amount.

  • go to Step 41

If the Class 16 remission has not been cancelled

  • telephone the Hunt Group (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  requesting removal of the Class 16 remission marker.
  • update household note OC01 to show cancellation has been actioned

Note: The household account should have now converted the ‘adjustment’ back into an ‘outstanding overpayment’ of the same amount.

  • go to Step 41

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Step 41

Check for Compliance activity, follow the guidance in TCM0134420.

  • If there is no Compliance activity or Compliance does not want the claim, go to Step 43.
  • If there is Compliance activity or Compliance wants the claim, go to Step 42.

Note: If you have any suspicions of fraudulent activity on the case you are working and there is no Compliance activity, then follow the guidance in TCM0134460 to refer the case to Claimant Compliance for further investigation.

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Step 42

Send any paperwork to the Compliance team

  • complete the stencil Disputed overpayment - compliance involvement (Word 52KB)
  • send the stencil, with copies of all the relevant paperwork (form TC846 or letter) by Taxpost Direct (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)
  • use Function MAINTAIN HOUSEHOLD NOTES and select the ‘Debt Recovery’ category to record the following

‘TCMZ*\**DOP*** Overpayment enquiry forwarded to Compliance, by xxxx Grp xx/xx *’

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

then, when you receive the stencil back from Compliance

  • take note of the Compliance summary provided on the stencil
  • go to Step 43.

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Step 43

Is the disputed overpayment you are investigating in the current year

  • yes, and the award is still open, go to Step 44.
  • yes, but the award is closed - for example, the current year award has Ceased or Terminated, go to Step 47.
  • no, you are dealing with an overpayment in a previous year, go to Step 47.

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Step 44

Check if, due to an in year recovery on the open award, that the payments have not reduced to nil. To do this

use Function VIEW HOUSEHOLD ACCOUNT

  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You will be taken to the Select Award screen
  • select the relevant award that you’ve been checking
  • select [OK]. You will be taken to the View Award Period Summary screen
  • check the Direct Payments still to be made field to determine if the customer has any WTC and CTC payments still to be made

    • If there are no further payments to be made, go to Step 45.

    Note: If no further payments are to be made, the in-year recovery has reduced the payments to nil so that most, or all, of the overpayment has been recovered. If payments are continuing, the in-year recovery has only reduced the payments to a smaller amount in order to fully recover the overpayment in this year.

    • If there are further payments to be made, go to Step 46.

Note: If the award has one tax credit with payments still to be made and the other tax credit has no payments to be made, you will need to go to both steps. For example, if there are no WTC payments still to be made, go to Step 45, then if there are still CTC payments to be paid, go to Step 46.

Note: The Direct payments still to be made column may show nil for both WTC and CTC.

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Step 45

Use Function VIEW AWARD

  • enter the customer’s NINO in the Key Entry Data screen
  • select the Period checkbox
  • enter ‘06-04-xxxx to 05-04-xxxx (insert relevant years at xxxx)’ in the Period field
  • select [OK]. You will be taken to the Select Award screen
  • starting with the latest award, work down the list of cases with an issue date to identify the version where the regular payments have reduced to nil. Select that version
  • select [OK]. You will be taken to the Award Summary screen
  • select the appropriate award in the Tax Credit Type box (CTC and/or WTC)

Note: If the amount in the Tax Credit Type field is 0.00, ignore this tax credit and select the award in Tax Credit Type box that has an amount recorded. If both tax credits have an amount recorded, you will need to do a separate calculation for each tax credit.

  • select [Payment Details]. You will be taken to the Payment Details screen for the appropriate tax credit
  • check if any payments have been set up on this award. If the Payment Details box is blank, then no payments have been set up on this award
  • when you have identified the relevant award, select [Cancel]. You will be taken back to the Award Summary screen

Note: If only provisional payments for the next tax year are shown, treat this as there being no payments set up for the current award.

  • select [View Calculation]. You will be taken to the View Calculation screen
  • make a note of the date in the Version Dated field on the Calculation of in year adjustment form (Word 53KB). This is the effective date of the award (A)
  • select [Cancel]. You will be taken back to the Award Summary screen
  • select [Cancel]. You will be taken back to the Select Award screen
  • select the latest award for the relevant year with an issue date
  • select [OK]. You will be taken to the Award Summary screen
  • make a note of the amount in the Total Entitlement field for the tax credit for the year (B) on the ‘Calculation of in year adjustment form’
  • divide the amount in the Total Entitlement field for the year by the number of days in the award (round up to the nearest whole pence) (C)

Note: For most years, the number of days in the award period will be 365, but in some cases it could be less depending on when the award started. If the award did not start on 06/04/xxxx, count the number of days between the start date of the award (include the start date as day one) and the end of the tax year.

  • select [View Calculation]. You will be taken to the View Calculation screen
  • select [View Elements]. You will be taken to the View Elements screen
  • make a note of the number of days from and including the effective date (A) and the date in the Ent Per End field (D) on the ‘Calculation of in year adjustment form’
  • multiply (C) and (D), to determine the amount adjusted in year (E) (round up to the nearest pence)

then

  • use Function VIEW HOUSEHOLD ACCOUNT and go to the View Award Period Summary screen for the relevant year
  • make a note of the total amounts in the Overpayment Outstanding field, Payments In field and Recovered from Other Awards field taking off any amount recorded under Recovered from this Award for that tax credit (F) on the ‘Calculation of in year adjustment form’
  • add together (E) and (F) to determine the total notional overpayment amount for that tax credit

then either

* calculate the in-year adjustment amount of the overpayment for the other tax credit
* or
* calculate the Finalised, Ceased or Terminated award

Note: If the case was Ceased or Terminated, you must use the computer overpayment figure.

then

* go to [Step 54](#IDAMNCQB).

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Step 46

Use Function VIEW AWARD

  • enter the customer’s NINO in the Key Entry Data screen
  • select the Period checkbox
  • enter ‘06-04-xxxx - 05-04-xxxx (insert relevant years at xxxx)’ in the Period field
  • select [OK]. You will be taken to the Select Award screen
  • work down the list of cases with an issue date and locate the award version with the maximum award in the relevant tax year
  • make a note of the start date shown in the Period covered by this notice field (A) on the Calculation of in year adjustment form (Word 53KB)

Note: If the customer has entitlement to both tax credits, you will need to do a separate calculation for each tax credit to calculate the overpayment amount. It does not matter which order you do them in.

  • go to the Award Summary screen and make a note of the amount in the Total Entitlement field for the tax credit for the year (B) on the ‘Calculation of in year adjustment form’
  • select the appropriate award in the Tax Credit Type box
  • select [Payment Details]. You will be taken to the View Payment Details screen
  • check the amount of the regular payment in the Payments Type field
  • select [Cancel]. You will be taken back to the Award Summary screen
  • select [Cancel]. You will be taken back to the Select Award screen
  • continue down the list until you have identified the award version where the payments have reduced. Select this version
  • select [OK]. You will be taken to the Award Summary screen
  • select the appropriate award in the Tax Credit Type box (CTC and/or WTC)
  • select [Payment Details]. You will be taken to the View Payment Details screen
  • check the Payments Type field to determine if the payments have reduced

Note: You are checking for the reduction in payments that triggered the dispute from the customer.

  • select [Cancel]. You will be taken back to the Award Summary screen
  • select [View Calculation]. You will be taken to the View Calculation screen
  • make a note of the date in the Version Dated field on the ‘Calculation of in year adjustment form’. This is the effective date of the award (C)
  • select [Cancel]. You will be taken back to the Award Summary screen
  • make a note of the amount in the Total Entitlement field for the tax credit in the year (D) on the ‘Calculation of in year adjustment form’
  • count the number of days from and including (A) up to and including (C) to determine the length of the period affected by the reduced overpayment (E)
  • divide the amount in the Total Entitlement field for the earliest award version (B) by the number of days in the award period and multiply by (E) (round up to the nearest pence) to determine the total paid between the start of the award and the start of the effective award (F)
  • divide the amount in the Total Entitlement field for the affected version (D) by the number of days in the award period and multiply by (E) (round down to the nearest pence) to determine the total notional entitlement between the start of the award and the start of the effective award (G)

Note: For most years, the number of days in the award period will be 365, but in some cases it could be less depending on when the award started.

  • deduct (G) from (F) to determine the total overpayment amount for the tax credit

then either

* calculate the in-year adjustment amount of the overpayment for the other tax credit

or

* calculate the Finalised, Ceased or Terminated award

then

* go to [Step 54](#IDAMNCQB).

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Step 47

Is the reason for the overpayment due to a contra error?

no, go to Step 48.

yes

  • find out the amount of the contra error
  • use Function VIEW HOUSEHOLD ACCOUNT
  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You will be taken to the Select Award screen
  • select the relevant year
  • select [OK]. You will be taken to the View Award Period Summary screen
  • select [Postings]. You will be taken to the View Award Period Postings screen
  • check for any of the following postings relating to a contra error

    • a posting made on a Sunday rather than the normal household pay day

    For example: the household pay day is usually a Friday and there is a payment posted for Friday 09-12-2005, than a further payment is posted on Sunday 11-12-2005.

    • duplicate payments posted on the same day that relate to the duplicate entries in the payment schedule

    Note: If the duplicate payments are issued after 12-12-2005, they can be identified by ‘double clicking’ on the entry in postings. The message ‘This posting was the result of an account discrepancy adjustment’ will display. These payments should add up to the amount noted at Step 14 from the message in Function VIEW HOUSEHOLD NOTES.

    • If the payment was a CTC and or WTC payment, make a note on the ‘Overpayment calculation sheet’ of how much was paid for each credit type

    then

    • If the payments were combined CTC/WTC payments

    • select the relevant payment
    • select [OK]. You will be taken to the View Giro Details and/or View BACS Details screen
    • note separately the amount of CTC and WTC included in each payment
    • make a separate note of the amount of overpayment for WTC and/or CTC on the ‘Overpayments worksheet’ and ‘Overpayment calculation sheet’ for each tax credit

    then

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Step 48

Is the reason for the overpayment due to manual payments?

no, go to Step 49.

yes

  • use Function VIEW HOUSEHOLD ACCOUNT
  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You will be taken to the Select Award screen
  • select the relevant year
  • select [OK]. You will be taken to the View Award Period Summary screen
  • select [Postings]. You will be taken to the View Award Period Postings screen
  • identify the manual payments to be remitted

    • If the payment was a CTC and/or WTC payment, make a note on the ‘Overpayment calculation sheet’ of how much was paid for each credit type

    then

    • If the payments were multiple payments

    • select the relevant payment
    • select [OK]. You will be taken to the View Giro Details screen
    • note separately the amount of CTC and WTC included in each payment
    • make a separate note of the amount of overpayment for WTC and/or CTC on the ‘Overpayments worksheet’ and ‘Overpayment calculation sheet’ for each tax credit

    then

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Step 49

Is the reason for the overpayment due to backdating payments?

  • no, go to Step 50.
  • yes

    • use Function VIEW HOUSEHOLD ACCOUNT
    • enter the customer’s NINO in the Key Entry Data screen
    • select the All checkbox
    • select [OK]. You will be taken to the Select Award screen
    • select the relevant year
    • select [OK]. You will be taken to the View Award Period Summary screen
    • select [Postings]. You will be taken to the View Award Period Postings screen
    • identify the payment to be remitted. The payment will be a CTC and/or WTC payment
    • make a note on the ‘Overpayment calculation sheet’ of how much was paid for each credit type

    then

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Step 50

Is the reason for the overpayment due to incorrect data having been entered or scanned onto the computer during capture or renewal of the claim?

  • no, go to Step 51.
  • yes

    • use Function VIEW AWARD to calculate the overpayment
    • go to the Select Award screen and select the award version that contains the incorrect data
    • select [OK]. You will be taken to the Award Summary screen
    • make a separate note of the total award amount for both WTC (A) and CTC (A1) on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    • select [Cancel]. You will be taken back to the Select Award screen
    • select the award version immediately prior to the one you have been looking at
    • select [OK]. You will be taken to the Award Summary screen
    • make a note of the total award amount for both WTC (B) and CTC (B1) on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    • select [Cancel]. You will be taken back to the Select Award screen
    • deduct (A) from (B) and (A1) from (B1) to determine the annual amount of the overpayment
    • separately divide the WTC and/or CTC result by the number of days in the award period to obtain a daily rate

    Note: The award period for the years 2003-2004 and 2007-2008 is 366 days.

    • calculate the number of days from and including the award start date to the day before the award was corrected

    Note: The date the award was corrected is in the Received Date field in the Select Application Version screen.

    Note: The number of days will be no more than 365 (366 for 2003-2004 and 2007-2008). If the award was corrected after the end of the award period, you must only calculate the number of days to the end of the award period.

    Note: If entitlement starts or finishes part way through the tax year, the award period would start or finish from the date entitlement does.

    • separately multiply the number of days by the daily rate for WTC and/or CTC, to establish the amount of overpayment for each tax credit
    • make a separate note of the amount of overpayment for WTC and/or CTC on the ‘Overpayments worksheet’ and ‘Overpayment calculation sheet’ for each tax credit

    then

    • for cases where the customer disputes an overpayment arising in tax year 2008-2009 or a subsequent year. If the customer notified HMRC of the mistake more than 30 days after receiving the award notice a further calculation will be required to identify how much of the overpayment should be remitted
    • for cases where the customer disputes an overpayment arising in an earlier tax year. If the customer failed to notify HMRC of the mistake promptly after receiving the award notice a further calculation will be required to identify how much of the overpayment should be remitted

    Note: Allow four days from the award issue date to calculate the received date of the award notice.

    (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) TCM0224280(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

    • Calculate the number of days from the date the customer notified HMRC of the mistake to the date the claim was actually processed with the correct details
    • separately multiply that number of days by the daily rate for WTC and/or CTC to establish the amount of overpayment to be remitted for each tax credit
    • make a separate note of the amount of overpayment to be remitted for WTC and/or CTC on the ‘Overpayments worksheet’ and the ‘Overpayment calculation sheet’ for each tax credit

    Note: If you have previously noted a figure on the ‘Overpayment calculation sheet’, replace this figure with the new overpayment amount to be remitted.

    then, in all cases

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Step 51

Is the reason for the overpayment due to a change of circumstances that has been incorrectly applied?

  • no, go to Step 52.
  • yes

    • If the relevant tax year is PY-5 or earlier

    • use the SEES calculation you obtained at Step 20 to note the correct total award amounts of WTC (A) and CTC (A1)

    Note: The SEES calculation is used to identify how much overpayment is due to HMRC failing its responsibilities. If the calculation increases the PY-5 or earlier award you should not make any payments.

    • If the relevant tax year is PY-4 or later

    • use Function VIEW APPLICATION to calculate the overpayment
    • enter the customer’s NINO in the Key Entry Data screen
    • select the All checkbox
    • select [OK]. You will be taken to the Select Application Version screen
    • select the claim version where the change of circumstances was correctly applied
    • select ‘File’ on the toolbar menu
    • select ‘Next Function’ from the options available
    • select Function VIEW AWARD
    • go to the Award Summary screen and make a note of the issue or version date, and the total award amount for both WTC (A) and CTC (A1) on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    Note: If this action takes you to an award version for a later year, you will need to use Function VIEW AWARD to check for an award with a version date close to the date of the claim version. You will need to select ‘Navigation’ on the toolbar menu and select ‘View Application’ from the options available to check if the award version was created by the claim you’re checking. If not, you will have to cancel out and check other award versions in the same manner until you locate the correct version.

    • select [Cancel]. You will be taken back to the Select Award screen

    then, in both cases

    • In Function VIEW AWARD, select the award where the change of circumstances or correction was incorrectly applied

    Note: For PY-4 or later, this will be the one immediately prior to the one you’ve just been looking at.

    • select [OK]. You will be taken to the Award Summary screen
    • make a note of the total award amount for both WTC (B) and CTC (B1) on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    • deduct (A) from (B) and (A1) from (B1) to determine the annual amount of the WTC and/or CTC overpayment
    • divide the result by the number of days in the award period to obtain the daily rate

    Note: The number of days will be no more than 365 (366 for the years 2003-2004 and 2007-2008). If the award was corrected after the end of the award period, you must only calculate the number of days to the end of the award period.

    Note: If entitlement starts or finishes part way through the tax year, the award period would start or finish from the date entitlement does.

    • calculate the number of days between the earliest effective date for the change of circumstances or correction to the date it was actually corrected

    Note: The effective date is the date from which the new circumstances are taken into account for the purpose of calculating award entitlement. The effective date of a change of circumstances is represented by either

    • a start date in the Include From field in the History screen, which you noted on the ‘Application history information form’ in Step 19

    or

    • if an end date has been entered in the History screen, the day after the end date which you noted on the ‘Application history information form’ in Step 19

    • separately multiply the number of days by the daily rate for WTC and/or CTC to establish the amount of overpayment for each tax credit
    • make a separate note of the amount of overpayment for WTC and/or CTC on the ‘Overpayments worksheet’ and the ‘Overpayment calculation sheet’ for each tax credit

    Note: If we have applied a change of income incorrectly, by either entering the wrong figure or failing to carry forward both customer 1’s income or customer 2’s income, the effective date will be 6 April or the date entitlement started.

    then

    • for cases where the customer disputes an overpayment arising in tax year 2008-2009 or a subsequent year. If the customer notified HMRC of the mistake more than 30 days after receiving the award notice, a further calculation will be required to identify how much of the overpayment should be remitted
    • for cases where the customer disputes an overpayment arising in an earlier tax year. If the customer failed to notify HMRC of the mistake promptly after receiving the award notice, a further calculation will be required to identify how much of the overpayment should be remitted

    Note: Allow four days from the award issue date to calculate the received date of the award notice.

    (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) TCM0224280(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

    • calculate the number of days from the date the customer notified HMRC of the mistake to the date the claim was actually processed with the correct details
    • separately multiply that number of days by the daily rate for WTC and/or CTC to establish the amount of overpayment to be remitted for each tax credit
    • make a separate note of the amount of overpayment to be remitted for WTC and/or CTC on the ‘Overpayments worksheet’ and the ‘Overpayment calculation sheet’ for each tax credit

    Note: If you have previously noted a figure on the ‘Overpayment calculation sheet’, replace this figure with the new overpayment amount to be remitted.

    then

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Step 52

Is the reason for the overpayment due to a change of circumstances that has been applied more than 30 days after it was notified?

  • no, go to Step 53.
  • yes

    • use Function VIEW APPLICATION to calculate the overpayment
    • enter the customer’s NINO in the Key Entry Data screen
    • select the All checkbox
    • select [OK]. You will be taken to the Select Application Version screen
    • select the claim version that had the late change of circumstances applied to it
    • select ‘File’ on the toolbar menu
    • select ‘Next Function’ from the options available
    • select Function VIEW AWARD
    • go to the Award Summary screen and make a note of the total award amount for both WTC (A) and CTC (A1) on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    Note: If this action takes you to an award version for a later year, you will need to use Function VIEW AWARD to check for an award version date close to the date of the claim version. You will need to select ‘Navigation’ on the toolbar menu and then select ‘View Application’ from the options available to check if the award version was created by the claim you’re checking. If not, you will have to cancel out and check other award versions in the same manner until you locate the correct version.

    • select [View Calculation]. You will be taken to the View Calculation screen
    • make a note of the date in the Version Dated field on the Calculation of in year adjustment form (Word 53KB)
    • select [Cancel]. You will be taken back to the Award Summary screen
    • select [Cancel]. You will be taken back to the Select Award screen
    • select the award immediately prior to the one you have just been checking

    Note: For cases where entitlement has reduced to nil or ended - for example, if the change recorded is a late household end - you do not need to make a comparison against the previous award amount. Check the incorrect claim version and divide by the number of days in the award period to calculate the daily rate.

    Note: If entitlement starts or finishes part way through the tax year, the award period would start or finish from the date entitlement does.

    • select [OK]. You will be taken to the Award Summary screen
    • make a note of the total award amount for both WTC (B) and CTC (B1) on the ‘Overpayments worksheet’

    Note: You can find this information in the Tax Credit Type box.

    • deduct (A) from (B) and (A1) from (B1) to determine the annual amount of the WTC and / or CTC overpayment
    • divide the result by the number of days in the award period to obtain a daily rate

    Note: The number of days will be no more than 365 (366 for the years 2003-2004 and 2007-2008). If the award was corrected after the end of the award period, you must only calculate the number of days to the end of the award period.

    • calculate the number of days between the end of HMRC’s 30 day limit for applying the change and the date HMRC processed the change to identify how much of the overpayment is not recoverable

    For example: the customer notified HMRC of a change on 01-06-2007. HMRC’s 30-day limit for making the change ended on 30-06-2007. HMRC made the change on 11-07-2007. The overpayment is not recoverable from 01-07-2007 to 11-07-2007, when HMRC processed the change.

    • separately multiply the number of days by the daily rate for WTC and/or CTC to establish the amount of overpayment to be remitted for each tax credit
    • make a separate note of the amount of overpayment to be remitted for WTC and/or CTC on the ‘Overpayments worksheet’ and the ‘Overpayment calculation sheet’ for each tax credit
    • go to Step 53.

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Step 53

Is the reason for the overpayment due to the customer not having a NINO?

  • no, go to Step 54.
  • yes

    • use Function VIEW HOUSEHOLD ACCOUNT
    • enter the customer’s temporary reference number in the Key Entry Data screen
    • select the All checkbox
    • select [OK]. You will be taken to the Select Award screen
    • select the relevant year
    • select [OK]. You will be taken to the View Award Period Summary screen
    • note the total amount of payments made for WTC and/or CTC to the customer

    Note: You can find this information in the Tax Credit Type box.

    • make a note of the amounts of WTC and/or CTC on the ‘Overpayments worksheet’

    then

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Step 54

Use Function VIEW OVERPAYMENT

  • enter the customer’s NINO in the Key Entry Data screen
  • select the All checkbox
  • select [OK]. You will be taken to the Select Award screen
  • select the relevant award
  • select [OK]. You will be taken to the View Overpayment screen
  • select [Maintain Dispute]. You will be taken to the Maintain Dispute screen in Function MAINTAIN DISPUTE
  • If the overpayment

    • is fully recoverable

    • select the appropriate dispute resolution reason from the Dispute Resolution drop down menu
    • select [OK]

    Note: You must repeat this action for each year in turn to re-instate recovery of the overpayment for that year.

    then

    • go to Step 55.

    • is partially recoverable

    • in Function MAINTAIN DISPUTE, on the Maintain Dispute screen, select the appropriate dispute resolution reason from the Dispute Resolution drop down menu
    • select [OK]

    Note: You must repeat this action for each year in turn to re-instate recovery of the overpayment for that year.

    then

    • select [Make Remission]. You’ll be taken to the Account Summary screen
    • remit the amount of the overpayment for CTC/WTC that you have identified. Follow the guidance in TCM0230060
    • go to Step 55.

    • Is not recoverable

    • in Function MAINTAIN DISPUTE, on the Maintain Dispute screen, select the appropriate dispute resolution reason from the Dispute Resolution drop down menu
    • select [OK]

    Note: You must repeat this action for each year in turn to re-instate recovery of the overpayment for that year.

    then

    • select [Make Remission]. You will be taken to the Account Summary screen
    • remit the amount of the overpayment for CTC / WTC that you have identified. Follow the guidance in TCM0230060
    • go to Step 56.

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Step 55

Check if the award has ended due to a Household breakdown

  • If the award has not ended due to a household breakdown, go to Step 56.
  • If the award has ended due to a household breakdown, check the date the customer reported the change to their household

    • If the change was reported within 93 days of the HHBD date and the claim was made before 06-04-12, go to Step 56.
    • If the change was reported within 31 days of the HHBD date and the claim was made from 06-04-12, go to Step 56.
    • If the change was reported more than 93 days after the HHBD date and the claim was made before 06-04-12 or more than 31 days after the HHBD date and the claim was made from 06-04-12

    • complete the Consider notional entitlement referral (Word 39KB) and send by email (This content has been withheld because of exemptions in the Freedom of Information Act 2000) , entering ‘Debt Case - Notional Entitlement’ in the subject field
    • update Household Notes, using the ‘Debt Recovery’ category, with the following message

    ‘OEXX - Household ended dd/mm/yy, date reported dd/mm/yy. Referred to the Notional Entitlement Team for consideration’

    • BF the case for four weeks to await reply from Notional Entitlement team

    Note: If you have not received a reply after four weeks, contact the Notional Entitlement Team.

    • when you receive a reply from the Notional Entitlement team, go to Step 56.

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Step 56

Prepare and issue a letter to the customer using the CSSG1 (and the CSSG2 to the ex-partner where appropriate) blank template and the paragraphs in the CSSG letters database

Note: In ongoing joint household cases, issue one letter addressed to both customers.

Note: In household breakdown cases, if the overpayment position has changed, a separate letter must be issued to each customer. The letter to the customer who has not written in must only give the overpayment decision. Do not include answers to other issues.

Note: In household breakdown cases, if the overpayment amount is fully recoverable only reply to the customer who has disputed the overpayment.

then

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Step 57

Use Function MAINTAIN HOUSEHOLD NOTES and select the ‘Debt Recovery’ category to record the following, as appropriate

Note: You must ensure that you mark any decision on Household Notes as retained.

‘OD85 - *DOP letter to (clmt1/clmt2)-HMRC (met all its resps/failed to meet resps for part of OP/ failed to meet resps).OP (insert tax year) is (fully recoverable £xxx/part remitted £xxx part recoverable/£xxx fully remitted).OP reason xxxx (CSSG *Team *Intls)’

‘OD13 - *DOP not applicable corrective action identified and CofC applied, CofC letter, TC846 & COP 26 issued to customer by (group XX teamXX)’

‘OD14 - *DOP not applicable, S17 Restore action applied by (group xx team xx)’

‘TCMZ *DOP PVE reason identified for overpayment papers passed to team correcting PVE for their action’

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

  • If you have recorded the note about PVE, go to Step 60.
  • If any other circumstances apply, go to Step 58.

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Step 58

Check whether the customer mentioned in their dispute correspondence they should not repay the overpayment due to

  • being declared bankrupt or sequestrated
  • the repayment causing them hardship

Note: The customer must have mentioned that they are in hardship before you consider referral to DMB or the MAPTH team.

then

  • If they did not mention either issue, go to Step 60.
  • If they mentioned

    • being declared bankrupt or sequestrated, follow the guidance in TCM0224040
    • hardship and you have carried out a full remit, go to Step 60.

    Note: This is because you have remitted the full overpayment and hardship no longer applies.

    • hardship and there is still an outstanding overpayment, go to Step 59.

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Step 59

Check if the overpayment is in direct or cross-year recovery. If the overpayment is in

  • direct recovery and

    • the customer has not provided income and expenditure details when referring to their hardship

    • make a note on the ‘Overpayments worksheet’ that hardship has been considered
    • insert the ‘Hardship Referral - Direct Recovery No Income And Expenditure’ paragraph into your response to the customer
    • go to Step 60.

    • the customer has provided income and expenditure details when referring to their hardship

    • complete form TC648 and clearly mark on the top of the form ‘Hardship Case’

    Note: You need to include details of the year of the overpayment that is in direct recovery on form TC648.

    • securely attach copies of all the correspondence or additional evidence to support the customer’s hardship to the form TC648
    • send the documents to DMB using Taxpost Direct (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
    • use Function MAINTAIN HOUSEHOLD NOTES and select the ‘Debt Recovery’ category to record the following

    ‘OD16 - Dispute action complete - papers passed to (relevant team) for consideration of hardship’

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

    then

  • cross-year recovery

    • complete form E-TC648 and clearly mark on the form ‘Hardship Case’
    • email the TC648 to the MAPTH team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) which should include the customer’s

    • name
    • NINO
    • details of the overpayment decision

    • use Function MAINTAIN HOUSEHOLD NOTES and select the ‘Debt Recovery’ category to record the following

    ‘OD16 - Dispute action complete - papers passed to MAPTH team for consideration of hardship’

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

    then

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Step 60

Send the remaining case papers and the ‘Overpayments worksheet’ to storage. Follow the guidance in TCM0074140.