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HMRC internal manual

Tax Credits Manual

Specialist areas - Complex: Complex cases - renewals - annual declaration - returned / Unprocessed S17 work list item created

Checklist

Before you follow this guidance, make sure

  • you have the correct user roles to follow this guidance.
  • you are in the correct MU. Use TCM0322460 for the correct MU number.

Background

The International Team is responsible for all claims where

  • any member of the household lives outside the UK
    and/or
  • any member of the household works outside the UK
    or
  • where it is classed as an International complex case.

As the majority of cases are clerically worked, you must follow this guidance when an Annual Declaration has been returned and an Unprocessed S17 work list item may have been created.

A customer may have earnings that are above the Lower Earnings Limit (LEL) but below the Primary Threshold (PT) and Class 1 NI contributions are not being paid. In these instances the customer is actually treated as having paid Class 1 NI contributions. The customer will satisfy the relevant entitlement conditions for UK family benefits to be paid under EC regulations.

An employment check is necessary to determine whether the EC regulations can be applied.

Where the earnings of the customer, or their partner, fall

  • above the LEL
  • below the PT, and
  • Class 1 NI contributions have not been paid

they should be treated as having paid Class 1 NI contributions and regarded as being subject to UK legislation.

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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.

Note: From 6 April 2017, customers will only get the Family Element of Child Tax Credit where they are responsible for a child or children born before that date.

Note: The individual child element of Child Tax Credit will no longer be awarded for third and subsequent children or qualifying young persons in a household, born on or after 6 April 2017, unless it meets the exception criteria.

Note: If you are dealing with a claim where an exception marker has been applied to any of the children/young persons included in the claim or the customer is reporting a change relating to an exception contact the Exception Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) For how to check if the exception marker has been applied, use TCM1000314.

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Step 1

Locate the Annual Declaration on your team. Follow the guidance in TCM0262120
Note: When following the guidance in TCM0262120, ignore the ‘If the Complex Case signal is shown’ option and carry on working through the guidance.

then, if you have been told to return to this guidance

  • check whether a ‘Payment Suspension’ has been set, if necessary. For how to do this, use TCM1000368.
    Note: If the customer or their partner is a crown servant or serves in the armed forces and both are working and/or one customer is not working, the ‘Payment Suspension’ will not be set as the payments can be made by the tax credits computer.

If a ‘Payment Suspension’ has been set, go to Step 2.

If a ‘Payment Suspension’ has not been set but you need to set it

If a ‘Payment Suspension’ has not been set and you do not need to set it, go to Step 2.

If you have issued a TCC50 and the action date has expired

  • accept HMRC income details
  • go to Step 2.

If you have issued a TCC50 and the customer has replied. Follow the guidance in TCM1000505.

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Step 2

Check to see if there is Real Time Information (RTI) data available. Follow the guidance in TCM1000505

then, if you have been told to return to this guidance

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Step 3

Note: If you are dealing with a claim where an exception marker has been applied to any of the children/young persons included in the claim or the customer is reporting a change relating to an exception contact the Exception Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) For how to check if the exception marker has been applied, use TCM1000314.

Check Household Notes to determine if either of the following messages is recorded
‘Complex - WTC Upfront Case’
‘Possible ESA case - Complex Case’

For how to do this, use TCM1000067.

If neither message is recorded, go to Step 4.

If ‘Complex - WTC Upfront Case’ is recorded

  • make a note of this
  • go to Step 4.

If ‘Possible ESA case - Complex Case’ is recorded

  • refer the case to your Technical Advice Line Liaison Office (TALLO) for advice on what to do
  • follow the advice
  • go to Step 4.

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Step 4

Check Household Notes or the clerical BF run to determine if form TC828 or duplicate form TC828 has been returned. For how to do this, use TCM1000067.

Note: A TC828 is not issued where the Other Member State (OMS) is competent and Child Tax Credit (CTC) is being paid in full because the rate of family benefits due from the OMS is Nil, or the customer has confirmed that no family benefits have been paid during the renewal period.

If form TC828 has not been returned, go to Step 5.

If form TC828 has been returned, go to Step 6.

If a duplicate form TC828 has not been returned, go to Step 6.

If form TC828 has not been issued, go to Step 6.

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Step 5

Send a duplicate form TC828

  • set a clerical BF date of 15 days in the future or the 1st Specified Date (1SD), whichever is the earliest
  • go to Step 6.

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Step 6

Before resolving any issues with the Annual Declaration

  • check the reason the item is on the Unprocessed S17 work list
  • follow the appropriate guidance in TCM0272480. For how to do this, use TCM1000004
  • go to Step 7.

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Step 7

Check which country is competent to pay the family benefits and confirm that National Insurance Contribution (NICS) payments are still being made.

  • use the ‘Competency Aid Decision Tree’. For how to do this, use TCM1000257
  • carry out a National Insurance check. Follow the guidance in TCM0284395
  • update the form TC648 with this information
  • go to Step 8.

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Step 8

Follow the guidance in TCM0284280.

If there has not been a reply to the duplicate form TC828, go to Step 11.

If the UK is competent for PY, go to Step 9.

If the UK is competent for PY and CY, go to Step 10.

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Step 9

Calculate the PY award and make a comparison with what is due and what has been paid
Note: The amount that has been paid in PY will be shown on the ‘Manual Payments’ stencil.

  • update the form TC648 with this information
  • use the SEES Tax Credits Entitlement Calculator to calculate the customer’s entitlement. For how to do this, use TCM1000089
    Note: When calculating the ‘other’ income for ‘WTC only’ cases, only take into account the ‘other’ income for the customer receiving WTC only.
  • where the Other Member State (OMS) is competent, complete form 1D
  • complete the ‘Finalised’ stencil for PY
  • complete the ‘Initial’ stencil for CY
  • complete form 1A for CY
  • complete the ‘Arrears’ stencil
  • go to Step 12.

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Step 10

Calculate the PY and CY awards and make a comparison with what is due and what has been paid
Note: The amount that has been paid in PY and CY will be shown on the ‘Manual Payments’ stencil.

  • update the form TC648 with this information
  • use the SEES Tax Credits Entitlement Calculator to calculate the customer’s entitlement. For how to do this, use TCM1000089
    Note: When calculating the ‘other’ income for ‘WTC only’ cases, only take into account the ‘other’ income for the customer receiving WTC only.
  • where the OMS is competent, complete form 1D
  • complete the ‘Finalised’ stencil for PY
  • complete ‘Initial’ stencil for CY
  • complete form 1A for CY
  • complete the ‘Arrears’ stencil
  • go to Step 12.

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Step 11

Calculate PY and pay WTC only for CY
Note: The amount that has been paid in PY and/or CY will be shown on the ‘Manual Payments’ stencil.

  • update the form TC648 with this information
  • use the SEES Tax Credits Entitlement Calculator to calculate the customer’s entitlement. For how to do this, use TCM1000089
    Note: When calculating the ‘other’ income for ‘WTC only’ cases, only take into account the ‘other’ income for the customer receiving WTC only.
  • where the OMS is competent, complete form 1D
  • complete the ‘Finalised’ stencil for PY
  • complete the ‘Initial’ stencil for the payment of WTC only for CY
  • complete form 1A for the payment of WTC only for CY
  • complete the ‘Arrears’ stencil
  • go to Step 12.

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Step 12

Check if the PY income was actual or estimated. For how to do this, use TCM1000209.

If the income is actual, go to Step 13.

If the income is estimated, go to Step 14.

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Step 13

Prepare and issue forms TC602A and TC602E
Note: Always issue a TC602(sn) with every TC602 you issue.
Note: Do not issue form TC602E if there is an ‘Appeal’ marker present. The Appeal Team will contact you when they’ve completed their action.
Note: If you’ve finalised PY and not restored CY prepare and issue a form TC602E only.
Note: Where there are two customers on the tax credit claim, issue a joint award notice to both customers irrespective of where they live showing both WTC and CTC awards.
Note: In ‘WTC Upfront’ or ‘WTC only’ cases, only complete and issue the notices with the income and/or job details of the customer who is receiving WTC only.
Note: On all manual notices issued, ensure you attach a return address sticker onto the front of each form.

When the claim has been finalised and an overpayment is showing, remit the overpayment to balance the award using remission class 13. Follow the guidance in TCM0230080 and TCM0320380.

  • add a household note to include the actions you have taken
  • set an issue date for the form TC602E. For how to do this, use TCM1000367
  • go to Step 15.

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Step 14

Using the help card, prepare and issue form TC602G
Note: Always issue a TC602(sn) with every TC602 you issue.
Note: In ‘WTC Upfront’ or ‘WTC only’ cases, only complete the notice with the income and/or job details of the customer who is working in the UK and receiving WTC only.
Note: Where there are two customers on the tax credit claim, issue a joint award notice to both customers irrespective of where they live showing both WTC and CTC awards.
Note: On all manual notices issued, ensure you attach a return address sticker onto the front of each form.

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Step 15

Consider if any of the customers details that have changed would affect their child benefit claim.
Note: Changes that could affect the Child Benefit claim are: a change of address, no longer OMS competent, child has left full-time non-advanced education, responsibility has now ended for one or more children on the claim.

If there are any changes that would affect the customer’s Child Benefit claim

  • complete the ‘CHB referral’ template and send it to the Child Benefit Office
  • go to Step 16.

If there are not any changes that would affect the customer’s Child Benefit claim, go to Step 16.

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Step 16

Complete the ‘Manual Payment Referral’ sheet

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Step 17

Prepare and issue form TC694 to the relevant OMS office.

Note: Your manager will have a list of the OMS addresses.

If there is an overpayment outstanding shown on the view account screen, go to Step 18.

If there is no overpayment outstanding shown on the view account screen, go to Step 19.

If any other circumstances apply, go to Step 19.

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Step 18

Remit the amount of system calculated overpayment using remission code 13. Follow the guidance in TCM0230060

  • complete a form TC33 (part 3 only)
  • update Household Notes with the message II58 from TCM0160040. For how to do this, use TCM1000001
  • refer the case to Debt Management and Banking (DMB) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
    Note: Do not issue form TC610 as DMB will issue this form when they receive the form TC33
  • go to Step 19.

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Step 19

Manually finalise the claim and renew if appropriate. For how to do this, use TCM1000149.

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Step 20

Update Household Notes with the appropriate messages - II07, II10, II14, II19, II21, II22, II23, II24, II25, II28, II58 - from TCM0160040. For how to do this, use TCM1000001.