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HMRC internal manual

Tax Credits Manual

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HM Revenue & Customs
Updated
, see all updates

Specialist areas - Specialist Trace: New claims only - All claims received in UK after 01/03/2014 - guidance for R1 and STU teams

Reasons not to follow this guidance
Checklist
Background
Appendix 1

Reasons not to follow this guidance

  • the claim has already been seen by International and their notes state the claim can be processed but the R1 action still needs to be taken
  • the claim has already been seen by International and their notes state the claim can be processed but the customer(s) require a NINO
  • the claim has an ‘IA26’, ‘IA27’, ‘IA28’ or ‘IA29’ note already present in Application notes
  • there are no children on the claim.

Checklist

Before you follow this guidance make sure

  • you follow the guidance in TCM0078000
  • you have the correct user roles to follow this guidance
  • you are in the correct MU. Use TCM0322460 for the correct MU number
  • You have access to:
    • Access to DWP Data (ADD)
    • National Insurance Recording System (NIRS)
    • National Insurance and PAYE Service (NPS)
    • Self-Assessment 2000 (SA 2000)
    • Child Benefit Case Notes Database.

Background

From 1 March 2014, claims from EEA nationals have further checks carried out to establish whether their employment or self-employment is genuine and effective. Where average earnings are above the Minimum Earnings Threshold (MET) and have been or are expected to be for a continuous period of three months, we will accept the work activity is genuine and effective and the customer is treated as satisfying the right to reside without the need for further enquiry.

In all cases where the average earnings fall below the MET, each case will be examined to take account of all circumstances to establish whether the work activity is genuine and effective.

From 1 July 2014 a three month residence in the United Kingdom requirement has been introduced into the eligibility rules for ChB and CTC to apply to job seekers and people who are not economically active (not working).

This means that people coming to the UK who are out of work or actively seeking work will need to be resident for three months from the date of arrival before becoming entitled to access ChB and/or CTC.

The requirement applies to both EEA and non EEA nationals.

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

If you are working on Rule 1 team, go to Step 2.

If you are working on STU team, go to Step 3.

Step 2

Follow the guidance in TCM0078060 up to and including Step 9 where you attempt to trace the individual.

Note: Make sure that you have traced and matched the customer if required prior to following the steps in this guidance to ensure the checks are carried out on the correct person.

Once you have attempted to trace the individual, check NTC to see if the claim is a single claim or a joint claim.

If the claim is single, go to Step 4.

If the claim is joint, go to Step 18.

Step 3

Follow the guidance in TCM0300120 to Step 10.

Check NTC to see if the claim is a single claim or a joint claim.

If the claim is single, go to Step 4.

If the claim is joint, go to Step 18.

Step 4

If the customer has a ‘P’ or ‘S’ NINO, go to Step 5.

If the customer does not have a ‘P’ or ‘S’ NINO, continue with the guidance you were previously following.

Step 5

Check to see if there are any children included on the Tax Credits claim. For how to do this, use TCM1000306.

If there are children included on the Tax Credits claim, go to Step 6.

If there are no children included on the Tax Credits claim, continue with the guidance you were previously following.

Step 6

Attempt to trace a record for the customer on ADD and make a note of their nationality. For how to do this, use TCM0132040.

Or

Attempt to trace a record for the customer on NIRS and make a note of their nationality. For how to do this, use TCM1000422.

For a list of nationalities, use TCM0320120.

If the customer is a UK national, continue with the guidance you were previously following.

If the customer is an EEA national, go to Step 7.

If the customer is a RoW national, go to Step 10.

Step 7

If the customer is a Croatian, Bulgarian, Romanian or Slovakian national, go to Step 9.

If the customer is any other EEA national, go to Step 8.

Step 8

Establish if the customer was present in the UK for five years or more using the following systems:

  • contributions shown on NIRS having been paid (Class 1 or 2) 5 years or more prior to the date of claim. For how to do this, use TCM1000421
  • employment is shown on PAYE 5 years or more prior to the date of claim. For how to do this, use TCM1000424
  • Tax Return filed in SA prior to 5 years or more prior to the date of claim. For how to do this, use TCM1000423
  • benefits being in payment on ADD 5 years or more prior to the date of claim. For how to do this use TCM0132040.

If any of the above are present then the customer was present in the UK for 5 years or more prior to the date of claim

  • continue with normal guidance to process the claim into award
  • update Application Notes with standardised message IA17 from TCM0160040. For how to do this, use TCM1000028.

If none of the above are present, go to Step 9.

Step 9

If the customer is employed, go to Step 16.

If the customer is self-employed

  • update Application Notes with standardised message HA30 from TCM0160020. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If the customer is neither employed nor self-employed, go to Step 11.

Step 10

If the customer is employed or self-employed, continue with the guidance you were previously following.

If the customer is neither employed nor self-employed, go to Step 11.

Step 11

If you know the date the customer entered the UK, go to Step 14.

Note: It is likely that only STU will have a date of entry on a response from a customer in a claim that has already been actioned.

If you do not know the date the customer entered the UK, go to Step 12.

Step 12

Attempt to trace a record for the customer on the Access to DWP Data system (ADD) and check if the customer has been awarded a DWP benefit. For how to do this, use TCM0132040.

If there is a live JSA or IS award and JSA or IS has been in payment within the last 3 months, go to Step 13.

If there is a live JSA or IS award and JSA or IS has been in payment for longer than 3 months and the customer is an EEA national

  • update Application Notes with standardised message II94 from TCM01640040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460, for a RTR test to be conducted on the jobseeker. For how to do this, use TCM1000023
  • take no further action.

If there is a live JSA or IS award and JSA or IS has been in payment for longer than 3 months and the customer is a RoW national

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • continue with the guidance you were previously following.

If there is no record of a DWP benefit in payment, go to Step 13.

Step 13

Attempt to trace a record for the customer on NIRS and make a note of the date held in the ‘Date of Entry’ field. For how to do this, use TCM1000425.

If there is no date of entry held

  • update Application Notes with standardised message II95 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If there is a date of entry held

  • make a note of this
  • go to Step 14.

Step 14

If the date of entry into the UK is before 01/07/2014 and the customer is a RoW national, continue with the guidance you were previously following.

If the date of entry into the UK is before 01/07/2014 and the customer is an EEA national

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460, for a RTR test to be conducted on the jobseeker. For how to do this, use TCM1000023
  • take no further action.

If the date of entry into the UK is on or after 01/07/2014, go to Step 15.

Step 15

If the date of claim is 3 months or more after the customer’s date of entry and the customer is an EEA national

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460, for a RTR test to be conducted on the jobseeker. For how to do this, use TCM1000023
  • take no further action.
    Note: Only forward claims to International where on form TC655, TC655r or other correspondence the customer has told us the child is living at an address outside the United Kingdom.

If the date of claim is 3 months or more after the customer’s date of entry and the customer is a RoW national

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • continue with the guidance you were previously following.
    Note: Where following your normal guidance and this may tell you to look for ‘AR9032’, ‘AR9033’, ‘AR9076’ or LOC code ‘EC’ or ‘EC Regs Apply’ do not automatically forward the claim to International as instructed.

If the date of claim is not 3 months after the customer’s date of entry

  • update Application Notes with standardised message II93 from TCM0160040. For how to do this, use TCM1000028
  • reject the claim.  For how to do this use TCM0070020
    Note: When rejecting the claim you should select the reason ‘Residency’ when prompted.
  • take no further action.

Step 16

Employment check

Check whether Real Time Information (RTI) in NPS shows that the person is employed and has been employed for the last three months.

Where there is employment for the last three months, check whether earnings are above the Minimum Earnings Threshold (MET).

Where the customer has not lived in the UK for three months, record any employment details from date of arrival in UK using NPS / PAYE. For how to do this, use TCM1000424.

Note: Where there is more than one employment for one customer, you will need to conduct the MET check on each employment where the ‘End Date’ field displays ‘LIVE’.

Note: Where the MET criteria is not clearly met in either employment, add the earnings from each employer together and re-apply the MET criteria.

Note: Do not add together employment for customer and their partner.

Note: Where you are working in the months April, May or June you will also need to check the previous tax year. To view previous year’s details, change the ‘Tax Year’ and select ‘Submit’.

If no employment details held

  • update Application Notes with standardised message HA31 from TCM0160020. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If employment details held

Note: The ‘view icon’ looks like a small magnifying glass.

Note: This will take you to the ‘Employment Details’ screen.

Note: This provides a summary of all the wage details notified to HMRC, the most recent at the top.

Note: The column ‘Wk/Mth No’ indicates frequency of payment (either weekly or monthly).

  • select the ‘view’ icon on the latest employment details held
  • check ‘Start Date ‘ field
  • select ‘RTI Data’ button from bottom right hand screen
  • calculate how many wage details have been notified for this tax year and where appropriate the previous tax year
    Note: For example, where you are working in March 2014 and there are 12 months wage details in the Record Summary Screen for the tax year 2013/14, make a note there are 12 months of employment.
    Note: For example, where you are working in May 2014 and there is 6 weeks wage details in the Record Summary Screen for the tax year 2014/15 and 20 from the previous tax year, make a note there are 26 weeks of employment.
    Note: You will use this later to calculate the average earnings.
  • under ‘Record Type’ select the view icon for the latest Full Payment Submission (FPS) shown on the screen
    Note: Selecting the ‘view icon’ will take you to the ‘RTI Payment Record Information’ screen.
  • check the right hand side of this screen for the ‘Taxable Pay to Date’, this will show how much has been earned in this tax year with this employer
  • use the table provided at Appendix 1 to calculate the average earnings are above the MET
    Note: For example, where you have 12 months wage details for 2013/14 the taxable pay to date must exceed £7,752.00 to be above the MET. Where you have 26 weeks employment spanning 2013/14 and 2014/15, use the threshold for the earliest tax year, in this example the taxable pay to date must exceed £3874.00.
  • go to Step 17.

Step 17

If there are three consecutive months of employment and earnings are above the MET and the customer is not a Slovakian national

  • update Application Notes with standardised message IA26 from TCM0160040. For how to do this, use TCM1000028
  • continue with the guidance you were previously following.

If there are three consecutive months of employment and earnings are above the MET and the customer is a Slovakian national

  • update Application Notes with standardised message IA26 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If there are three consecutive months of employment and earnings are not above the MET

  • update Application Notes with standardised message IA27 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If there are not three consecutive months of employment

  • update Application Notes with standardised message IA27 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

Step 18

If both customers have a ‘P’ or ‘S’ NINO, go to Step 19.

If one customer has a ‘P’ or ‘S’ NINO and one does not have a NINO, go to Step 19.

If neither customer has a ‘P’ or ‘S’ NINO, continue with the guidance you were previously following.

If one customer has a ‘P’ or ‘S’ NINO and one has another type of NINO, continue with the guidance you were previously following.

Step 19

Check to see if there are any children included on the Tax Credits claim.  For how to do this, use TCM1000306.

If there are children included on the Tax Credits claim, go to Step 20.

If there are no children included on the Tax Credits claim, continue with the guidance you were previously following.

Step 20

Attempt to trace a record for the customer on ADD and make a note of their nationality. For how to do this, use TCM0132040.

Or

Attempt to trace a record for the customer on NIRS and make a note of their nationality. For how to do this, use TCM1000422.

For a list of nationalities, use TCM0320120.

If both customers are EEA nationals, go to Step 21.

If both customers are RoW nationals, go to Step 24.

If one customer is an EEA national and the other is a RoW national who has selected ‘Yes’ in the ‘UK National’ field in ‘Application Information’ on NTC, go to Step 24.

If one customer is an EEA national and the other is a RoW national who has selected ‘No’ in the ‘UK National’ field in ‘Application Information’ on NTC, go to Step 21.

If one customer is an EEA or RoW national and the other is a UK national, go to Step 24.

If one customer is an EEA national and you do not know the nationality of the other customer as they do not have a NINO, go to Step 21.

If one customer is a RoW national and you do not know the nationality of the other customer as they do not have a NINO, go to Step 24.

Step 21

If both customers are Croatian, Bulgarian, Romanian or Slovakian nationals, go to Step 23.

If both customers are any other EEA nationality, go to Step 22.

If one customer is a Croatian, Bulgarian, Romanian or Slovakian national and the other is a RoW national, go to Step 23.

If one customer is any other EEA national and the other is a RoW national, go to Step 22.

If any other situation applies, contact your TALLO for advice.

Step 22

Establish if the customer was present in the UK for five years using the following systems:

  • contributions shown on NIRS having been paid (Class 1 or 2) 5 years or more prior to the date of claim. For how to do this, use TCM1000421
  • employment is shown on PAYE 5 years or more prior to the date of claim. For how to do this, use TCM1000424
  • Tax Return filed in SA prior to 5 years or more prior to the date of claim. For how to do this, use TCM1000423
  • benefits being in payment on ADD 5 years or more prior to the date of claim. For how to do this use TCM0132040.

If any of the above are present for one of the customers then they were present in the UK for 5 years or more prior to the date of claim

  • continue with normal guidance to process the claim into award
  • update Application Notes with standardised message IA17 from TCM0160040. For how to do this, use TCM1000028.

If none of the above are present, go to Step 23.

Step 23

If both customers are employed, go to Step 30.

If both customers are self-employed

  • update Application Notes with standardised message HA30 from TCM0160020. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If one customer is employed and the other is not employed, go to Step 30.

If one customer is self-employed and the other is not employed

  • update Application Notes with standardised message HA30 from TCM0160020. For how to do this, use TCM1000028
  • transfer the case to the International Claims MU, from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If neither customer is employed or self-employed, go to Step 25.

Step 24

If either customer is employed or self-employed, continue with the guidance you were previously following.

If neither customer is employed or self-employed and the date of claim is on or after 01/07/2014, go to Step 25.

If neither customer is employed or self-employed and the date of claim is before 01/07/2014, continue with the guidance you were previously following.

Step 25

If you know the date the customers entered the UK, go to Step 28.

Note: It is likely that only STU will have a date of entry on a response from a customer in a claim that has already been actioned.

Note: Where you work on R1 or R2 team and have already accessed NIRS to note the date of entry, you must still answer this step as if you do not know the date of entry.

If you do not know the date the customers entered the UK, go to Step 26.

Step 26

Attempt to trace a record for the customers on the Access to DWP Data system (ADD) and check if they have been awarded a DWP benefit. For how to do this, use TCM0132040.

If there is a live JSA or IS award, and JSA or IS has been in payment within the last 3 months, go to Step 27.

If there is a live JSA or IS award, and JSA or IS has been in payment for longer than 3 months and both customers are EEA nationals

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims MU, from TCM0322460, for a RTR test to be conducted on the jobseeker. For how to do this, use TCM1000023
  • take no further action.

Note: Only forward claims to International where on form TC655, TC655r or other correspondence the customer has told us the child is living at an address outside the United Kingdom.

If there is a live JSA or IS award and JSA or IS has been in payment for longer than 3 months and both customers are RoW nationals

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • continue with the guidance you were previously following.

If there is a live JSA or IS award and JSA or IS has been in payment for longer than 3 months, one customer is an EEA national and one customer is a RoW national, contact your TALLO for advice.

If there is no record of a DWP benefit in payment, go to Step 27.

Step 27

Attempt to trace a record for the customers on NIRS and make a note of the date held in the ‘Date of Entry’ field. For how to do this, use TCM1000425.

Note: Where you have already noted the date of entry from NIRS at an earlier step, there is no need to do this action again.

If there is no date of entry held

  • update Application Notes with standardised message II95 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims MU, from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If there is a date of entry held

  • make a note of this
  • go to Step 28.

Step 28

If the date of entry into the UK is before 01/07/2014 and the customers are RoW nationals, continue with the guidance you were previously following.

If the date of entry into the UK is before 01/07/2014 and the customers are EEA nationals

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460, for a RTR test to be conducted on the jobseeker. For how to do this, use TCM1000023
  • take no further action.

If the date of entry is before 01/07/2014, one customer is an EEA national and one customer is a RoW national who has ticked ‘Yes’ in the UK national field on NTC, continue with the guidance you were previously following.

If the date of entry is before 01/07/2014, one customer is an EEA national and one customer is a RoW national who has ticked ‘No’ in the UK national field on NTC

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460, for a RTR test to be conducted on the jobseeker. For how to do this, use TCM1000023
  • take no further action.

If the date of entry into the UK is on or after 01/07/2014, go to Step 29.

If one customer has a date of entry before 01/07/2014 and the other customer has a date of entry on or after 01/07/2014, contact your TALLO for further advice.

Step 29

If the date of claim is 3 months or more after the customer’s date of entry both customers are EEA nationals

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460, for a RTR test to be conducted on the jobseeker. For how to do this, use TCM1000023
  • take no further action.

If the date of claim is 3 months or more after the customer’s date of entry and both customer are RoW nationals

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • continue with the guidance you were previously following.

If the date of claim is 3 months or more after the customer’s date of entry, one customer is an EEA national and one is a RoW national who has ‘Yes’ in the UK National field on NTC, continue with the guidance you were previously following.

If the date of claim is 3 months or more after the customer’s date of entry, one customer is an EEA national and one is a RoW national who has ‘No’ in the UK National field on NTC

  • update Application Notes with standardised message II94 from TCM0160040. For how to do this, use TCM1000028
  • continue with the guidance you were previously following.

If the date of claim is not 3 months after the customer’s date of entry RoW only

  • update Application Notes with standardised message II93 from TCM0160040. For how to do this, use TCM1000028
  • reject the claim. For how to do this use TCM0070020
    Note: When rejecting the claim you should select the reason ‘Residency’ when prompted.
  • take no further action. 

Step 30

Employment check

Check whether Real Time Information (RTI) in NPS shows that the person is employed and has been employed for the last three months.

Where there is employment for the last three months, check whether earnings are above the MET.

Where the customer has not lived in the UK for three months, record any employment details from date of arrival in UK using NPS / PAYE. For how to do this, use TCM1000424.

Note: Where there is more than one employment for one customer, you will need to conduct the MET check on each employment where the ‘End Date’ field displays ‘LIVE’.

Note: Where the MET criteria is not clearly met in either employment, add the earnings from each employer together and re-apply the MET criteria.

Note: Do not add together employment for customer and their partner.

Note: Where you are working in the months April, May or June you will also need to check the previous tax year. To view previous year’s details, change the ‘Tax Year’ and select ‘Submit’.

If employment details are held for one or both customers*, *check the details.

Note: Only check both applicants employment details if one fails.

  • select the view icon on the latest employment details held
    Note: The ‘view icon’ looks like a small magnifying glass.
    Note: This will take you to the ‘Employment Details’ screen.
  • check ‘Start Date’ field
  • select ‘RTI Data’ button from bottom right hand screen
    Note: This provides a summary of all the wage details notified to HMRC, the most recent at the top.
    Note: The column ‘Wk/Mth No’ indicates frequency of payment (either weekly or monthly)
  • calculate how many wage details have been notified for this tax year and where appropriate the previous tax year
    Note: For example, where you are working in March 2014 and there are 12 months wage details in the Record Summary Screen for the tax year 2013/14, make a note there are 12 months of employment.
    Note: Where you are working in May 2014 and there is 6 weeks wage details in the Record Summary Screen for the tax year 2014/15 and 20 from the previous tax year, make a note there are 26 weeks of employment.
    Note: You will use this later to calculate the average earnings.
  • under ‘Record Type’ select the view icon for the latest Full Payment Submission (FPS) shown on the screen
    Note: Selecting the ‘view icon’ will take you to the ‘RTI Payment Record Information’ screen.
  • check the right hand side of this screen for the ‘Taxable Pay to Date’, this will show how much has been earned in this tax year with this employer
  • use the table provided at Appendix 1 to calculate the average earnings are above the MET
    Note: For example, where you have 12 months wage details for 2013/14 the taxable pay to date must exceed £7,752.00 to be above the MET. Where you have 26 weeks employment spanning 2013/14 and 2014/15, use the threshold for the earliest tax year, in this example the taxable pay to date must exceed £3874.00.
  • go to Step 31.

If no employment details held for either customer

  • update Application Notes with standardised message HA31 from TCM0160020. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

Step 31

If there are three consecutive months of employment, earnings are above the MET for one or more customers and neither customer is a Slovakian national

  • update Application Notes with standardised message IA26 from TCM0160040. For how to do this, use TCM1000028
  • continue with the guidance you were previously following.

If there are three consecutive months of employment, earnings are above the MET for one or more customers and one or more customer is a Slovakian national

  • update Application Notes with standardised message IA26 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If there are three consecutive months of employment and earnings are not above the MET for either customer

  • update Application Notes with standardised message IA27 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

If there are not three consecutive months of employment for either customer

  • update Application Notes with standardised message IA27 from TCM0160040. For how to do this, use TCM1000028
  • transfer the case to the International Claims, MU from TCM0322460. For how to do this, use TCM1000023
  • take no further action.

Appendix 1

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)