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HMRC internal manual

Tax Credits Manual

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HM Revenue & Customs
Updated
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Specialist areas - complex: complex cases - removing second adult element post award

Checklist

Before you follow this guidance, make sure

  • the case is a joint WTC only claim where one customer only is subject to immigration control
  • you have access to the National Insurance Recording System (NIRS) and know how to obtain the customer’s nationality from it
  • you have the correct user roles to follow this guidance. Use the B&C Roles and Access Catalogue. You can find this by going to the Benefits & Credits homepage, selecting ‘R’ on the B&C A-Z index, selecting ‘Roles and Access Process’, selecting ‘Roles & Access Catalogue’ from the Related links menu
  • you are in the correct MU. Use TCM0322460 for the correct MU number.

Background

Following a change in legislation from 6 April 2010, the second adult element of Working Tax Credits (WTC) will not be paid on a WTC only claim from a couple where only one customer is subject to immigration control and not a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey. From 1 July 2013 Croatia became a member of the EU.

Reasons not to follow this guidance

You don’t need to follow this guidance if

  • the case is pre-award
  • the claim is from a single person
  • the claim is from a couple with children
  • there is not any eligibility to WTC, including nil entitlement
  • the claim is from a couple and neither customer is subject to immigration control
  • the claim is from a couple and both are subject to immigration control
  • the claim is from a couple and the customer who is subject to immigration control is a national of The Former Yugoslav Republic of Macedonia or Turkey.
  • the claim is from a couple and the customer who is subject to immigration control is a national of Croatia and the claim is dated on or after the 1 July 2013

Required information

Obtain the following information (from the source - for example, customer, employer)

  • confirmation that the customer is

    • subject to immigration control

and

* not a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey or the nationality is not known and customer has failed to respond to enquiries about their nationality.

Guidance

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

Step 1

Select a case from the Controlled Access Folder (CAF), physical correspondence or WAM referral work list item

Note: When selecting cases, action in the order of highest to lowest WTC award amount.

  • note the relevant case details on form TC648
  • go to .

Step 2

Check the tax credits systems, case papers and NIRS to determine if the case satisfies all the following criteria for removal of the second adult element

  • the case is post award, for how to do this, use TCM1000025 
  • it is a joint claim for WTC only with ongoing eligibility, including nil entitlement. For how to do this, use TCM1000190 
  • only one of the customers is subject to immigration control. For how to do this, use TCM1000394 
  • the customer who is subject to immigration control is not a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey or has failed to respond to enquiries about their nationality.

If all of the above criteria is satisfied, go to .

If you are unsure whether the above criteria is satisfied and further enquiries are required, go to .

If any of the above criteria is not satisfied, go to .

Step 3

Issue an enquiry form TC1107 to the customer who is subject to immigration control

  • set a BF date of 37 days from the date of issue
  • go to .

Step 4

Where form TC1107 is returned before the expiry date, check the customer’s subject to immigration control status and nationality.

If the customer is subject to immigration control and isn’t a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey, go to .

If the customer is subject to immigration control and is a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey, go to .

If the customer is not subject to immigration control, go to .

If the customer’s subject to immigration status and/or nationality is unclear, refer to your TALLO for advice.

If the customer does not respond to the form TC1107 by the BF expiry date, go to .

Step 5

Check the ‘unprocessed change of circs worklist’, physical correspondence or WAM referrals for any reported changes of circumstances. For how to do this, use TCM1000142.

If there are any reported changes of circumstance

  • make a note of these on form TC648
  • go to .

If there are no reported changes of circumstance, go to .

Step 6

Check the customer’s immigration status and nationality, following the reported change of circumstance.

If the customer is subject to immigration control and is not a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey, go to  

If the customer is subject to immigration control and is a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey, go to .

If the customer is not subject to immigration control, go to .

If the customer’s immigration status and/or nationality is unclear, refer to your TALLO for advice.

Step 7

If you’re dealing with an ‘unprocessed change of circs worklist’ item

  • transfer the worklist item onto the Complex Case Team Management Unit (MU) (if not already there). Use TCM0322460 for the correct MU number. For how to do this, use TCM1000023 
  • refer to your TALLO for advice on how to deal with the unprocessed change of circumstance
  • go to .

Step 8

Follow the guidance in TCM0042260 

then, if you can continue

  • go to .

Step 9

Set the complex case and manual correspondence signal, if not already set. For how to do this, use TCM1000136 and TCM1000032 

  • go to .

Step 10

Suspend the payments on the tax credits computer. For how to do this, use TCM1000232 

Note: The payment suspension must be set for both customers where applicable.

  • go to .

Step 11

Add up the total system and manual payments shown on the tax credits computer as issued in the period for which the customer is not entitled to the WTC second adult element.

  • refer to the relevant steps in TCM0220080 
  • record the total payments issued on form TC648
  • go to .

Step 12

Calculate entitlement to WTC excluding the second adult element in the award period using SEES tax credits entitlement calculator

  • select the ‘Print’ function from the SEES toolbar to print off a copy of the entitlement calculation sheet to retain in the case papers
  • go to .

Note: Exclude the second adult WTC element by selecting the option ‘No’ from the dropdown list on the SEES tax credits entitlement calculator.

Note: Include all relevant household income, including any received by the customer who is subject to immigration control when working out WTC entitlement using SEES entitlement calculator.

Note: Only select ‘Yes’ for the 30-hour WTC element if one of the customer is working 30 hours. The case will qualify for the 30-hour premium regardless of which customer is working 30 hours or more. Unlike CTC, for WTC, the total hours worked by both customers cannot be aggregated to make up to 30.

Note: Check that eligibility to WTC exists by following the guidance in TCM0114120.

Note: As the earliest effective date of this change is 06/04/2010, the earliest tax year on which it can be applied is 2010-2011. However, if the case is being paid at the provisional rate in the current tax year, then the SEES calculation will need to be done for the previous tax year.

Note: Select the ‘Help’ function on the toolbar within the SEES tax credits entitlement calculator for further information on how to use the calculator.

Step 13

Check entitlement to WTC on SEES calculation sheets.

If WTC entitlement was nil prior to removing the second adult element and following removal is still nil, go to .

If there was WTC entitlement prior to removing the second adult element and following removal of the second adult element WTC entitlement is either zero or below the minimum level payable, go to .

If there was WTC entitlement prior to removing the second adult element and following removal of the second adult element WTC entitlement is above the minimum level payable, go to .

Note: The minimum limit for payment, also known as de minimus, is set at £26.00 for the full tax year. This means that tax credits will only be paid where entitlement for the full tax year is above £26.00.

Step 14

Calculate the overpayment and amounts to be remitted and offset

  • complete a SEES calculation using the SEES tax credits entitlement calculator. For how to do this, use TCM1000089 
  • print off a copy of the completed SEES calculation sheet and retain in the casepapers
  • follow the guidance in TCM0224280 to determine recoverability of any overpayment
  • record the overpayment recoverability decision on form TC648
  • go to .

Step 15

Record the overpayment and remitted amounts that you have calculated in the appropriate columns on the Remissions Database.

If the case you are dealing with was identified as subject to immigration control and requiring removal of the second adult element prior to 06/04/10

  • select code 45 ‘STIC case identified pre 06/04/10’
  • go to .

If the case you are dealing with was identified as subject to immigration control and requiring removal of the second adult element after 06/04/10

  • select code 46 ‘STIC case identified post 06/04/10’
  • go to .

Step 16

Complete and print off an appropriate version of the manual award notice (TC602) using the latest template

  • complete and print off the explanation letter TC1099.

Note: Make sure that you address the TC1099 to both customers.

If there is not any entitlement to WTC or entitlement is less than the minimum amount payable or offsetting has meant that no further payments are due

  • record your action on form TC648
  • go to .

If there is entitlement to WTC and further payments are due

  • record your action form TC648
  • go to .

Step 17

To calculate and schedule the manual payments, follow the relevant steps in TCM0220080 

  • complete the Manual Payments Calculation Sheet. For how to do this, use TCM1000396 
  • go to .

Step 18

Pass the case papers to your manager for checking.

If the case is approved by your manager and there is entitlement to WTC and further payments of WTC are due

  • record your action on form TC648
  • update Household Notes using the ‘Retained Notes’ category with the message IW01 from TCM0160040. For how to do this, use TCM1000001 
  • pass the completed Manual Payment Calculation Sheet to the EEA Manual Payments Team
  • file the case in an appropriate BF run
  • take no further action.

If the case is approved by your manager and after removal of the second adult element there are not any further payments of WTC due

  • record your action on form TC648
  • update the Household Notes using the ‘Retained Notes’ category with the message IW02 from TCM0160040. For how to do this, use TCM1000001 
  • file the case in an appropriate BF run
  • take no further action.

If the case is approved by your manager and was previously a nil award and following removal of the second adult element is still nil award

  • record your action on form TC648
  • update the Household Notes using the ‘Retained Notes’ category with the message IW03 from TCM0160040. For how to do this, use TCM1000001 
  • file the case in an appropriate BF run
  • take no further action.

If the case is not approved and requires further work, action as instructed by your manager.

Step 19

Check the case circumstances.

If the customer is not subject to immigration control and still entitled to the WTC second adult element

  • update Household Notes using the ‘Retained Notes’ category with the message IW04 from TCM0160040. For how to do this, use TCM1000001 

then

  • where the case is from an EEA national requiring right to reside action, send the case papers to the International Team
  • where right to reside action is not required, go to .

If the customer is subject to immigration control and a national of Croatia, The Former Yugoslav Republic of Macedonia or Turkey

  • update the Household Notes using the ‘Retained Notes’ category with the message IW05 from TCM0160040. For how to do this, use TCM1000001 
  • go to .

If the customer is subject to immigration control but entitled to CTC and responsible for one or more child/young person beyond 31 August of the current tax year

  • update Household Notes using the ‘Retained Notes’ category with the message IW06 from TCM0160040. For how to do this, use TCM1000001 
  • go to .

If the customer is subject to immigration control and responsible only for one child/young person who turns 16 years old prior to 31 August in the current tax year and it hasn’t yet been confirmed that they will continue in full-time non-advanced education (FTNAE)

  • update the Household Notes using the ‘Retained Notes’ category with the message IW07 from TCM0160040. For how to do this, use TCM1000001 
  • BF the case papers to 31 August of current tax year
  • go to .

Step 20

Check the case circumstances upon expiry of BF date.

If the customer is subject to immigration control and eligible for WTC only, including nil entitlement, go to .

If the customer is subject to immigration control but entitled to CTC and responsible for one or more child/young person beyond 31 August of the current tax year

  • update Household Notes using the ‘Retained Notes’ category with the message IW06 from TCM0160040. For how to do this, use TCM1000001 
  • go to .

If the customer is subject to immigration but not eligible to CTC and WTC

  • update Household Notes using the Retained Notes category with the message IW08 from TCM0160040. For how to do this, use TCM1000001 
  • go to .

Step 21

Send the documents to storage, follow the guidance in TCM0074140.