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HMRC internal manual

Tax Credits Manual

Payment - payment profile: Payment profile - payment method (Info)

The preferred method of payment of tax credits is direct to the nominated recipient into any bank account, building society account or Post Office® card account (POca) that will accept Bacs and has been authorised by the customer.

The account can be in the name of a third party but, if there is a query, you must only deal with the customer and not the account holder.

We will only pay by off system payments in exceptional circumstances. This will be for a limited period only, usually four weeks (TCM0212200 refers).

If the customer has not provided any bank account, building society account or POca details, a check will be made on the systems holding the Child Benefit and the Common Enquiry Service (CES) to see if the customer receives benefit payments into an account. If an account exists and we have issued a TC1071 or a TC2037 to the customer, tax credit payments will be paid into that account.

If no Child Benefit account can be used and the customer has not provided any bank account, building society account or POca details, payment will be postponed. The postponement may last until the earliest one of the following circumstances occur

  • bank or other account is notified (A)
  • 5 April in the same tax year (B)
    or
  • three months after the date payment was postponed (C).

Where the period of postponement in (B) or (C) has expired, it shall then be treated as if the customer ceased to be entitled from the date on which the postponement was made.

If the customer subsequently provides bank account or building society account details, they will be entitled to tax credits for a period of up to three months prior to the date on which they notified you of their bank or building society account details.

The customer will also be entitled to tax credits for the remaining period of their award.

If exceptional circumstances prevent the customer being able to obtain a bank account, building society account or POca throughout the period of the award, contact the Informed Choice Team (ICT). The customer will continue to be entitled to tax credit for the period of the award.

If the customer is able to open an account but they need longer than the relevant period to provide you with bank account, building society account or POca details, the time in which the customer can provide you with the details will be extended. Reasons that can be accepted for this are if the customer has been ill or abroad.

If the customer has opted for payment by Bacs but has provided invalid bank account details, this will result in a verification failure. When the verification failure has been resolved, the payments will be made by Bacs.

If a customer is entitled to more than one tax credit, paid at the same frequency and by the same method of payment, the payments will be combined into a single payment.