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HMRC internal manual

Tax Credits Manual

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Extra information - miscellaneous information: Notional entitlement calculations examples

Note: The backdating period is 93 days up to 05-04-12 and 31 days from 06-04-12.

 
 

Example 1

This example is where there was a partner at the date the claim was made and the partner is still living with the customer.

Katie made a claim as a single person on 6 August 2005 that was not backdated. She had been living with Nick at the date the claim was made but thought that, since he was a long distance lorry driver who was only at home two days each week, she did not need to include him on the claim.

On 1 December 2007, she phones the Tax Credits Helpline because she realises she has made a mistake. The award is then terminated. On the same day, Katie and Nick make a claim as a couple and this claim is backdated 93 days to 01-09-2007.

The amounts overpaid between 06-08-2005 and 01-12-2007 are

2005-2006 (06-08-2005 to 05-04-2006) £7,160
   
2006-2007 (06-04-2006 to 05-04-2007) £9,440
2007-2008 (06-04-2007 to 01-12-2007) £7,310

Katie was able to provide details of Nick’s income. He was not included in another claim. Had Katie and Nick made a claim as a couple at the correct time they would have received

2005-2006 (06-08-2005 to 05-04-2006) £4,985
   
2006-2007 (06-04-2006 to 05-04-2007) £5,235
2007-2008 (06-04-2007 to 31-08-2007) £3,265

Note: The period for the calculation of the notional entitlement ends on 31-08-2007. This is because the correct new claim was backdated to 01-09-2007.

Katie’s overpayments after applying notional entitlement are therefore

2005-2005 £2,175
   
2006-2007 £4,205
2007-2008 £4,045

Example 2

This example is where the partner no longer lives with the customer and the partner’s income has not been provided.

Sally made a claim on 06-05-2005 as a single customer that was not backdated. Ian had been living with her at the date of claim but they separated on 06-12-2005. Sally did not include him on the claim she made on 06-05-2005 but, on 06-11-2007, she contacts HMRC to notify her mistake.

You terminate the claim on 06-05-2005 and, on the same day, Sally makes a new claim as a single person, which is backdated to 06-08-2007. The amounts overpaid between 06-05-2005 and 05-11-2007 are

2005-2006 (06-05-2005 to 05-04-2006) £6,676
   
2006-2007 (06-05-2006 to 05-04-2007 £5,310
2007-2008 (06-04-2007 to 05-11-2007) £4,388

Sally cannot provide details of Ian’s income, so you cannot apply notional entitlement for the period 06-05-2005 to 05-12-2005. However, you calculate that if she had made a claim as a single person on 06-12-2005 she would have been entitled to tax credits of

2005-2006 (06-12-2005 to 05-04-2006) £2,427
   
2006-2007 (06-04-2006 to 05-04-2007) £2,575
2007-2008 (06-04-2007 to 05-08-2007) £2,508

Note: The period for the calculation of the notional entitlement ends on 05-08-2007. This is because the correct new claim was backdated to 06-08-2007.

Sally’s overpayments after applying notional entitlement are

2005-2006 £4,249
   
2006-2007 £2,735
2007-2008 £1,880

Example 3

This is where the partner no longer lives with the customer and the partner’s income has been provided.

The details are as in but Sally can provide details of Ian’s income. Ian was not included in another claim. Had they claimed as a couple for the period 06-05-2005 to 05-12-2005 they would have received £2,604. Sally’s overpayments are now

2005-2006 £1,645
   
2006-2007 £2,735
2007-2008 £1,880