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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
, see all updates

Specialist areas - international claims: manually paying WTC and CTC together

Checklist

Before you follow this guidance make sure

  • where the customer is living in the UK and they have a partner and/or children living in the Other Member State (OMS), follow the guidance in TCM0288580 
  • you are in the correct Management Unit (MU). Use TCM0322460 for the correct MU number

Background

Claims received from European Economic Area (EEA) nationals (migrant workers) who have children or qualifying young person (QYP) residing in the OMS or cross border workers who live in an OMS with their families and work in the UK or live in the UK with their families and work in an OMS can be paid Child Tax Credit (CTC) where

  • they have the right to reside in the UK
  • they pay UK National Insurance (NI) contributions

Note: If cross border workers live in the UK but work in the OMS they do not need to pay UK NI contributions.

  • the composition of the family members has been verified by the OMS using E400 series forms or SEDs and the details match those on the tax credits claim.

Customers receiving Child Benefit for the children living in the OMS may already have the composition of the family members verified by the OMS. This information can be obtained from the International Group Database (IGDB).

If the E400 series forms or SEDs have been completed and returned by the OMS before WTC has been put into payment and the details match those on the tax credits claim, we can pay WTC and CTC together.

Note: Where the entitlement conditions for CTC

  • are not satisfied at the date of claim

and

  • are satisfied on a date, the later date being after the date of claim but not later than the date on which the decision is being taken
  • an award of CTC should be made from the later date.

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: Remember, when dealing with any referrals from Compliance, to update the Compliance officer by phone once your actions are complete and give the information they ask for.

Step 1

Check for any change of circumstances. To do this

  • check the manual file for any Work Area Mailbox (WAM) referrals, physical change of circumstances or a copy of the ‘Free Format’ screen to see if there has been a change of circumstance
  • check the Unprocessed Change of Circs work list. For how to do this, use TCM1000208.

Note: From 6 April 2012 notified change of circumstances which will result in an increase in entitlement will be backdated to a maximum of one calendar month.

Note: From 6 April 2012 notified change of circumstances which do not result in an increase in entitlement will continue to be backdated to the date of change if appropriate.

If there are any change of circumstances, contact your Technical Advice Line Liaison Officer (TALLO) for advice.

If there are no changes of circumstances, go to .

Step 2

Before you manually calculate any WTC and CTC, decide which elements of tax credits are to be paid. For example

  • For WTC consider - 30 hour, disability, severe disability, 50 +, income figure.
  • Note: Where both customers live in the UK and one customer works in the Republic of Ireland (ROI) and one customer works in the United Kingdom (UK) the claim can be paid on system. A manual SEES calculation is no longer required. Update Household Notes with the message IA37.
  • Note: Where a single claim is received and the customer is living in the ROI and working in the UK the claim can be paid on system. A manual SEES calculation is no longer required. Update Household Notes with the message IA37.

Note: The 50+ element will be withdrawn on 6 April 2012. Award notices issued from 11 October 2011 will show a revised award for 2011-2012 but will not explain that the 50+ element will stop in April 2012.

Note: From 6 April 2012, people aged 60 or over will qualify for WTC if they work at least 16 hours weekly.

Note: Where the customer is a migrant worker living in the UK and they have a partner living in the OMS, only use the income figure of the customer living in the UK. The customer will only be entitled to the WTC basic element and 30 hour premium, and if applicable the disability element. Do not include the second adult element of the customer living in the UK. Only include the lone parent element if the child(ren) lives with the customer in the UK.

Note: A single claim from a cross border worker who normally lives in the UK with the family but travels to the OMS to work or lives in the OMS with their family but travels to work in the UK will be entitled to the Lone Parent element of WTC if they are aged 16 or over and working at least 16 hours a week. If applicable, they may be entitled to the disability element.

Note: Cross border claims where the worker is a member of a couple who are both ordinarily resident in the UK or OMS but both work in the OMS or UK will be entitled to make a joint claim to WTC including the second adult element if the are aged 16 or over and working at least 24 hours a week, with one customer working at least 16 hours weekly. If applicable, they may be entitled to the disability element. Use the income of the UK based employment only.

Note: Cross border claims where the worker is a member of a couple who are both ordinarily resident in the OMS and only one works in the UK will be entitled make a single claim to WTC including the Lone Parent element if the person working in the UK is aged 16 or over and working at least 16 hours a week. If applicable, they may be entitled to the disability element. Use the income of the UK based employment only.

Note: From 6 April 2012, there will be a change to the Tax Credit eligibility rules. Couples with children will be required to work at least 24 hours weekly. Hours can be added together but one customer must be working at least 16 hours weekly to qualify for Working Tax Credit. Please contact your TALLO for further advice.

Note: From 6 April 2012 there are new rules for couples with children which will give an exception where the customer is incapacitated. Follow the guidance in TCM0112160. The incapacity start date must now be recorded on the child care screen.

Note: From 6 April 2012 the second income threshold has been removed.

Note: From 6 April 2012 a decrease in income of up to £2,500 may be disregarded, anything above this should be recalculated.

Note: All claims received from 6 April 2012 will be entitled up to 31 days backdating.

Note: All claims received prior to 6 April 2012 will be entitled up to 93 days backdating.

  • For CTC consider - children, disabled or severely disabled and QYP.

Note: From 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 QYP is continuing in FTNAE. Where the customer does not inform Tax Credits, the CTC will end. This must be considered in all manual calculations.

Note: Where a QYP currently in FTNAE has an end date of either 31/08/CY or 31/08/CY+1 applied on NTC and is reaching the age of 20, the system will only pay CTC up to the day prior to their 20th birthday.

Note: Follow the ‘B&C EEA Competence for Family Benefits’ decision tree on SEES to determine which state is competent for family benefits.

Note: Use the income figure of all customers regardless of where they live - in the UK or the OMS.

Note: The baby element has been withdrawn. Any new claims made after 6 April 2011 with a baby under the age of one year that requires backdating into Previous Year (PY) will only receive the baby element of the family element for any entitlement in the 93 days prior to 6 April 2011.

* make a note of which elements to use for the calculation of both WTC and CTC 
* use the SEES ‘Tax Credits Entitlement Calculator’ to calculate the WTC and CTC, if applicable. For how to do this, use [TCM1000089](https://www.gov.uk/hmrc-internal-manuals/tax-credits-manual/tcm1000089) 

Note: You will need to do separate SEES calculations for both WTC and CTC.

Note: Make sure you select the ‘Home’ tab and select ‘Clear all details’ after each calculation to make sure you do not include any CTC elements in a WTC calculation or WTC elements in a CTC calculation.

Note: Where the period from the start of the date of claim to today’s date has passed 5 April, you will need a separate entitlement calculation for both the previous year (PY) and current year (CY).

Note: For claims where the employment is UK based, CTC cannot be backdated prior to the customer being affiliated to the UK Social Security Scheme.

Note: Non UK EEA National customers must satisfy the right to reside condition at the date of claim.

Note: To calculate the effective date of claim, you must also take into account

* the date either 93 days back from the date of the claim for claims received before 6 April 2012, or 31 days back from the date of the claim for claims received after 6 April 2012 
* the date the customer started work 
* for the CTC element the date the customer started to work and the date the customer started to pay either Class 1 or Class 2 NI contributions for UK based employment.

Note: Cross Border workers who live in the UK but work in the OMS do not need to be paying Class 1 or Class 2 NI contributions.

* child’s date of birth.

For how to do this, use TCM1000218 

  • print off a copy of the SEES calculation to keep with the manual file
  • update Household Notes with the message II47 from TCM0160040. For how to do this, use TCM1000001 
  • go to .

Step 3

Check if all the following details are noted on the manual file

  • main carer details
  • payment frequency
  • whether the customer has provided details of a bank account or wants to be paid by giro.

If all the above details are noted in the manual file, go to .

If all the above details are not noted in the manual file

  • obtain the missing details from the tax credits computer. For how to do this, use TCM1000249 
  • update the manual file with the missing details
  • go to .

Step 4

Access function ‘Manage Verification Failures’ for the claim you are working.

Note: You must access function ‘Manage Verification Failures’ from the ‘Verification Failures’ work list and not directly from the ‘Function Menu’. For how to do this, use TCM1000004 and TCM1000107 

  • manually verify the rule 12 verification failure
  • manually verify any rule 2 verification failures

For how to do this, use TCM1000299 

  • go to .

Step 5

Process the claim to status ‘Award Issued’.

Note: You must access ‘Amend Application Corrections’, following the process at .

  • update the manual file with the action you have taken
  • go to .

Step 6

Check if the status of the claim is now ‘Award Issued’. For how to do this, use TCM1000118.

Note: The tax credits computer can take up to 48 hours for the status of the claim to change to ‘Award Issued’. During this time, you must check regularly if the claim status has changed.

If the status of the claim is ‘Award Issued’, go to .

If the status of the claim is not ‘Award Issued’, contact your TALLO for advice on what to do.

Note: Do not refer the case to your TALLO without first allowing 48 hours for the status of the claim to change to ‘Award Issued’.

Step 7

Check if the customers have provided details of a bank account on the manual file.

If either customer has provided details of a bank account, go to .

If neither customer has provided details of a bank account

  • update Household Notes with the message II53 from TCM0160040. For how to do this, use TCM1000001 
  • go to .

Step 8

Note: You must complete to in their entirety at the same time to avoid any system generated payments and forms being issued to the customer.

  • set the ‘Complex Case’ and ‘Manual Correspondence’ markers. For how to do this, use TCM1000136 
  • complete the ‘Amend Finish’ screen. For how to do this, use TCM1000032 

Note: The ‘Complex Case’ and ‘Manual Correspondence’ markers will not be set until you complete the ‘Amend Finish’ screen.

  • select the case you are working from the ‘Unprocessed Changes of Circs’ work list with ‘COC’ in the ‘Change Details’ column. For how to do this, use TCM1000208 
  • go to .

Step 9

Note: Do not apply the Free Format note where there is a reported change of circumstances that is also on the Free Format note or another Unprocessed Changes of Circs work list item with a reason other than ‘COC’. Contact your TALLO for advice on what to do.

Apply the ‘Free Format’ note. For how to do this, use TCM1000233.

Note: You may need to repeat this step as there may be more than one ‘Free Format’ note which has generated an ‘Unprocessed Changes of Circs’ work list item with the reason ‘COC’.

  • go to .

Step 10

Note: When you have applied the ‘Free Format’ note you will be taken back to the ‘Maintain Worklist’ screen.

Check if the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has been deleted. For how to do this, use TCM1000208.

If the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has been deleted, go to .

If the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has not been deleted

  • delete the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column. For how to do this, use TCM1000160 
  • go to .

Step 11

Check if an award version has been created which has a payment schedule. For how to do this, use TCM1000373 

Note: The tax credits computer can take up to 48 hours for the payment schedule to be set up. During this time you must check regularly if a payment schedule has been set up. Do not refer the case to your TALLO without first allowing 48 hours for the payment schedule to be set up.

If an award version has been created that has a payment schedule set up

  • make a note of any payments that have been issued. For how to do this, use TCM1000312 
  • go to .

If an award version has been created that has not had a payment schedule set up, go to .

Step 12

If a payment schedule has not been set up, contact your TALLO for advice.

Note: Do not refer to your TALLO without first allowing 48 hours for the payment schedule to be set up.

If a payment schedule has been set up(This content has been withheld because of exemptions in the Freedom of Information Act 2000)  

  • make a note if any payments have been made. For how to do this, use TCM1000312 
  • go to .

If a payment schedule has not been set up(This content has been withheld because of exemptions in the Freedom of Information Act 2000) , contact your TALLO for advice.

Note: Do not refer to your TALLO without first allowing 48 hours for the payment schedule to be set up.

Step 13

Suspend the payments. For how to do this, use TCM1000232.

Note: This will create a ‘Suspended Payments (Payments)’ work list item.

Note: The payments must be suspended for each customer.

  • update the manual file with the action you have taken
  • update Household Notes with the message II10 from TCM0160040. For how to do this, use TCM1000001 
  • go to .

Step 14

Check if any payments have been made to the customer. For how to do this, use TCM1000312.

If payments have not been made to the customer, go to .

If giro payments have been made to the customer

  • make a note of the total net amount paid on form TC648
  • go to .

If BACS payments have been issued to the customer

  • go to .

Step 15

Check to see if the BACS payment is more than what the customer is entitled to.

If the BACS payment is less than what the customer is entitled to

  • make a note on TC648 to deduct this amount from the manual payment
  • go to .

If the BACS payment is more than what the customer is entitled to

  • contact the Bank Liaison Team to recall the payment. For how to do this, use TCM1000134 
  • make a note on TC648
  • go to .

Step 16

If the BACS payments could not be recalled

  • make a note of the net amount paid on form TC648. For how to do this, use TCM1000312 
  • go to .

If the BACS payments have been recalled, go to .

Step 17

Complete the appropriate payment details forms and pass them to your manager for checking

Note: You will need to complete a ‘Manual Calculation Sheet’ for each tax year you have calculated WTC and CTC entitlement for.

Note: If the customer has already received payments for the award period, make sure you adjust the yearly award by the amount of payments already issued.

  • go to .

Step 18

Once the appropriate payment details forms have been passed as correct by your manager, go to .

Step 19

Using the information on the form TC648 and ‘Manual Calculation Sheet’, complete a TC602 manual award notice for the WTC and CTC award.

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: Where the period from the start date of the claim to today’s date has passed 5 April, you will need to issue a TC602 manual award notice for each tax year.

Note: Where only CTC is payable, include variable ‘nil award to WTC’.

Note: For claims where the employment is UK based, CTC cannot be backdated prior to the customer being affiliated to the UK Social Security Scheme.

  • for migrant workers

    • issue TC602 manual award notice to the customer who lives and works in the UK
    • access SEES and issue TC1127 to the customer who lives and works in the UK.
  • for cross border workers who live in the OMS

    • issue TC602 manual award notice to the customer who works in the UK
    • access SEES and issue TC1127 to the customer who works in the UK.
  • for cross border workers who live in the UK

    • issue one TC602 manual award notice to the home address, addressed to all customers on the claim
    • access SEES and issue TC1127 to the home address, addressed to all customers on the claim.
  • update Household Notes with the message II35 from TCM0160040. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001 
  • update Household Notes with the message II14 from TCM0160040. For how to do this, use TCM1000001 
  • send the appropriate payment details forms to the Manual Payments Team
  • go to .

Step 20

Send form E001 or SED to the OMS to inform them of the family benefits being paid in the UK so that they are not also paying them. Follow the guidance in TCM0305100 

  • keep a copy of the form in the manual file
  • pass the ‘Payment stencil’ to the Manual Payments Team
  • pass the manual file to the Renewals Team
  • take no further action.