Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
, see all updates

Specialist areas - complex: change of circumstances - complex to non-complex

Checklist

Before you follow this guidance, make sure you are in the correct MU. Use TCM0322460 for the correct MU number.

Background

Some changes of circumstances will result in a complex case (including cross-border and family supplement cases) becoming non-complex, for example

  • death of a spouse in a polygamous or polyandrous marriage
  • family break-up in a polygamous or polyandrous marriage

Note: This instruction applies even if there are more than two customers remaining in the family.

  • a child or young person in a family of 19 children is no longer eligible for Child Tax Credit (CTC)

Note: 6 April 2014 there will be a change to Full time non advanced education (FTNAE) where an end date of 31/08/CY will be applied on NTC. This change applies to 18 and 19 year olds. The customer will have to inform us each year whether the qualifying young person is continuing in FTNAE. Where the customer does not inform Tax Credits, the CTC will end. This must be considered in all manual calculations.

  • income-related Employment and Support Allowance (ESA) ending for a tax credits customer receiving Working Tax Credit (WTC)
  • a tax credits customer receiving income-related ESA who becomes ineligible for WTC

Note: From 1 May 2012 the period for which people can receive contribution-based ESA will be limited to 12 months.

  • a customer subject to immigration control (STIC) in a joint claim becomes responsible for a child, resulting in entitlement to both WTC and CTC
  • a customer in a joint claim is no longer subject to immigration control, resulting in entitlement to the 2nd adult element of WTC
  • a customer (in a childless two-customer family) serving a custodial sentence of more than 12 months being released from prison
  • a change in residency or employment involving movement between Member States of the European Economic Area (EEA) has resulted in the United Kingdom (UK) becoming competent to pay CTC at the full rate, without offset.

Note: Consider supplement up to the end of the month in which the change of circumstances occurred.

As the Complex Case signal is set, the change of circumstance will be referred to the International Complex / UK Complex Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) . Use TCM0322460 for the correct MU number.

Because it is not possible to lift the Complex Case signal, the team will

  • end the family on the complex claim
  • capture as a new claim from the day after the family has been ‘ended’.

In the case of the death of a spouse or a family break-up in a polygamous or polyandrous marriage, it will be necessary to check the postcode area and whether the customer(s) is/are Pension Credit Qualifying Age (PCQA). For how to do this, use TCM1000628.

If appropriate, you should then invite the customer(s) to make a fresh claim. For all other changes listed, it will not be necessary for the customer to complete a fresh claim form.

Once the manual renewal action is complete, the Manual Correspondence signal will be lifted and the claim will be fully managed through the computer.

If all complex involvement has ended and the case no longer needs to be paid manually, you will need to recapture the claim on NTC so it can now be paid on system. To deal with claims where a change of circumstance results in a complex case becoming non-complex, consider steps 1 to 13.

Guidance

Note: When sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian / Data Security Team for advice.

Step 1

Check for any Compliance activity on the claim. Follow the guidance in TCM0134440, then if referred back to this guidance, go to .

Step 2

Use Function ‘VIEW APPLICATION’ to view all the screens for the latest version of the claim to check what information has been captured.

Check the payments stencil to see whether the payments the customer has received when the claim should have been non-complex, have already been paid under the complex claim.

Note: If it appears the customer may have been underpaid or overpaid as the change was not applied in time, the complex claim will need to be recalculated. Use the SEES calculator to complete a manual calculation.

If any of the following circumstances apply

  • there are now 18 or fewer children in the family

Note: If there are now 18 or fewer children in the family because one of the children has died, contact the Business Helpdesk through your Technical Advice Line Liaison Officer for further guidance before you go to .

  • the customer has been released from prison
  • income-related ESA has ended for a tax credits customer who is also receiving WTC
  • WTC eligibility has ended for a tax credits customer who is also receiving income-related ESA
  • in a STIC the customer’s immigration status has changed
  • in a STIC case a child is added to the claim.

Take a screen print of each screen, go to .

If the UK is now competent to pay family benefits

  • locate the most recent manual calculation from the case papers held in manual bf
  • take a screen print of each screen
  • go to .

If one of the customers in a polygamous or polyandrous marriage has died, go to .

If there has been a family break-up in a polygamous or polyandrous marriage, go to .

Step 3

Use the SEES Tax Credit Entitlement Calculator to calculate the revised award of tax credits

  • enter details (taken from the screen prints) of the customer’s entitlement from the effective date of the claim. Follow the guidance in the SEES Menu System Help
  • include the change of circumstance from the effective date of the change
  • take a screen print of the calculation
  • go to .

Step 4

Check the manual payment form filed in the casepapers

  • note the ‘Paid up to date’ recorded on the form
  • do not make any further manual payments to the customer.

Note: Consider payment of arrears where a switch in competency is due to employment.

If the change of circumstance is due to

  • death of a customer in a polygamous or polyandrous marriage case, go to
  • a family break-up in a polygamous or polyandrous marriage case, follow the guidance in TCM0036100 then, go to
  • a cross-border or family supplement case, go to
  • a switch in competency, go to .

If there are any other change of circumstances, go to .

Step 5

Complete a Priority One Change Of Circumstance stencil and send it to the P1 Team.

Use Function ‘MAINTAIN HOUSEHOLD NOTE’

  • enter the following message in the Additional Information field. ‘TCMZ Complex Case - P1 Team only required to notify CBO. International Complex / UK Complex Team will take all other action’. Use TCM0322460 for the correct MU number
  • go to .

Note: Because you have entered details of a family breakdown, an incorrect automated notice will be produced. As the Manual Correspondence signal is set, you will receive this notice from the team working the Manual Correspondence work list.

Step 6

Calculate the total amount of CTC that has been offset during the period of the award up to the date the UK became competent to pay full family benefits. The weekly amount of the offset will be recorded on the manual payments calculation sheet filed in the casepapers

  • make a note of the offset on form TC648
  • go to .

Step 7

Use Function ‘MAINTAIN HOUSEHOLD NOTES’ to apply the appropriate household note to the claim, go to .

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

Step 8

Use Function ‘AMEND APPLICATION’

  • select the ‘Change of Circumstances’ option
  • go to the ‘Household Details’ screen
  • enter the family end date in the ‘Household End Date’ field (use the effective date of the change of circumstances as the family end date)
  • select ‘Household Breakdown’ from the ‘Household End Reason’ drop down menu
  • select ‘OK’, you will be taken to the ‘Amend Finish’ screen
  • enter the appropriate household note. For how to do this, use TCM1000001
  • enter the date the notification of the change was received
  • enter the source of the change (Paper)
  • enter the reason for the change (designatory changes)
  • select ‘OK’

Note: The changes you have made in this function will not be applied until you complete the ‘Amend Finish’ screen and select ‘OK’.

Note: The ‘Received Date’ field will always default to today’s date. You must enter the date the change of circumstances was notified, not the date the change is actioned. If there is more than one notification date then the earliest notification date must be entered.

Note: If there is more than one source of change, you must enter the original source that started the process, for example, if you are processing a paper correspondence change of circumstances and a worklist item and the paper correspondence stamp date is earlier.

  • go to .

Step 9

If the message ‘S18 Refinalisation Rules - Potential inappropriate refinalisation for CCYY-CCYY. If you have the authority to re-finalise under S19, S20 or S21 of the Tax Credit Act 2002 or due to an appeal decision. Press ‘OK to process the change or Cancel’ displays the changes you are making will re-finalise the claim

  • select ‘OK’ on the message
  • go to .

If the message ‘S18 Refinalisation Rules - Actual Income for CCYY-CCYY is required. This change will not be accepted’ displays you will not be able to make the change because the PY actual income is required

  • select ‘OK’ on the message
  • go to .

If the message ‘S18 Refinalisation Rules - You do not have the authority to re-finalise CCYY-CCYY. This change will not be accepted. Please refer to the appropriate team’ displays the changes you are making will re-finalise the claim

  • select ‘Cancel’

You will be taken to the ‘Amend Application Details’ screen

  • select ‘Cancel’

the message ‘All changes to the application will be lost for this session, do you wish to proceed?’ will display

  • select ‘Yes’
  • pass the case to a Level 2 User or your manager. For more information, use ‘Level 1 and Level 2 users’ on TCM0320260
  • take no further action.

If none of the messages display, go to .

Step 10

Use Function ‘CAPTURE APPLICATION’ to capture a new claim. Follow the guidance in TCM0062120, enter the claim details from the screen prints.

Note: Remember to capture only the appropriate change of circumstances. If a child has left the family, this child will be omitted from the claim.

In the ‘Summary Information’ screen

* enter the Effective Date as one day after the family end date you have entered on the ‘Household Details’ screen in the complex claim
* enter the employment details as one day after the family end date you have entered on the ‘Household Details’ screen in the complex claim
* enter the Received Date as two days after the family end date you have entered in the ‘Household Details’ screen in the complex claim
* add appropriate household note. For how to do this, use [TCM1000001](https://www.gov.uk/hmrc-internal-manuals/tax-credits-manual/tcm1000001)

Note: This will prevent automatic backdating of the claim that would result in an overpayment.

* select ‘OK’

Note: Geographic Step Closed (GSC) business rules will recognise if you are trying to capture a claim that is in a closed postcode area and the customer(s) is not/are not PCQA.

You will be presented with a warning message stating that: ‘The Information captured is for a closed postcode. Application will be rejected unless overridden’.

If you are trying to capture a claim that relates to a closed postcode area and the customer(s) is not/are not PCQA

* override GSC rules. For how to do this, use [TCM1000629](https://www.gov.uk/hmrc-internal-manuals/tax-credits-manual/tcm1000629).
* go to .

If you are trying to capture a claim that relates to a closed postcode area and the customer(s) is/are PCQA

Note: in the case of a joint claim only one of the claimants needs to be PCQA

* select 'Process'
* go to .

If you are trying to capture a claim that does not relate to a closed postcode area

* select 'Process'
* go to .

Step 11

Because the manual correspondence signal is set, the entries on the Manual Correspondence work list will be transferred to your MU.

If you are dealing with a family break-up in a polygamous or polyandrous marriage

  • manually issue the notice relating to the family break-up
  • go to .

If you are dealing with any other change of circumstances, go to.

If the claim was a cross-border case or family supplement case

  • notify the customer on the appropriate TC602 how much has been deducted from the award of CTC because of family benefits paid by the Other Member State (OMS)
  • go to .

Step 12

Use Function ‘MAINTAIN WORKLISTS’ to clear the entry / entries on the Manual Correspondence work list

  • select ‘Manual Correspondence’ work list from the drop down menu for the work list type field
  • select the office or unit you want from the drop down list for the Management Unit (MU) field, the screen will redisplay with the entries currently on the work list

Note: The office or unit you want may already be displayed.

  • select the work item you want to work
  • select ‘Delete’
  • go to .

Step 13

The case is now non-complex

  • refer the case papers to Renewals
  • issue the appropriate TC602 to both customers
  • take no further action.