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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
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Payment: potential entitlement: potential entitlement - maintain (Info)

If a customer reports a decrease in in-year income (or when they renew their claim) their tax credit payments are adjusted to reflect their new income level.

From April 2007, any entitlement due from the date the customer reported the change to the date of the calculation will be paid to the customer.

We won’t make an extra payment at that stage for the period from 6 April up to the date the customer told us their income had gone down.

The potential entitlement will be offset against any in-year overpayment that may arise throughout the year. The amount of potential entitlement remaining to be paid after any in-year recovery amount has been offset is called ‘potential payment’. If there’s any potential payment remaining, it will be released automatically when the customer finalises their award.

The purpose of potential entitlement is to reduce the number and size of any overpayments. This will also help manage the concerns of customers regarding the potential reduction of future awards.

In Function MAINTAIN POTENTIAL ENTITLEMENT you can

  • view any potential entitlement or potential payment that has been created because of the income change
  • view the potential entitlement history for an award
  • release any potential entitlement that arises in year using the High Level User role (if you have this role).

From this function, you can access

  • Function VIEW AWARD DETAILS
  • Function VIEW S17 DETAILS
  • Function VIEW OVERPAYMENT.