Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
, see all updates

Stopping Tax Credits - Establish if a change can be made to an in year finalisation claim (AG)

Background

Once an award has been finalised at the end of the tax credit year it can only be changed in a limited number of circumstances.

You must establish which years the change affects, because it could be for

  • the tax year in which the Universal Credit start date minus 1 day falls (UY)
  • the tax year prior to the tax year in which the Universal Credit start date minus 1 day falls (UY-1)

or

  • any combinations of these years.

Take particular care when UY change is reported and the UY claim has been finalised and the claim’s In Year Specified Date (IYSD) has passed, changes to the UY claim cannot always be made.

Note: You must consider normal backdating rules whenever you make a change to UY claim.

Note: If you are making a change to a UY finalised award, the computer will recognise if you have a Level 1 or Level 2 user role. If you are a Level 2 user, you must access the user role ‘AMBS Auth S18’ to make a change to a UY finalised award. If you do not have a Level 2 user role, you will not have authority to make a change that would cause a potentially inappropriate refinalisation. For more information, use ‘Level 1 and Level 2 users’ on TCM0320260.

Guidance

To establish if a change can be made, consider Steps 1 to 39.

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/Data Security Team for advice.

Step 1

Before you follow the guidance in this Action Guide, follow the guidance in TCM0138020.

Then, if you are told to return to this guidance

If you are dealing with a Work Area Mailbox (WAM) referral on a non-complex case, go to  

If you are dealing with a WAM referral on a non-complex case for the Universal Year -1 (UY-1) or earlier. Follow the guidance in TCM0042280 

If you are dealing with an expired BF date and you are waiting to establish full details of the change, go to  

If you are dealing with an expired action date and you are waiting to establish if the change still applies, go to  

If you have received documents from storage, go to  

If none of the above apply, go to .

Step 2

Establish what changes have been reported using the evidence provided and which award period the changes relate to.

Note: Before deciding which award period the change relates to you must apply the normal backdating rules.

If you determine what the change is and which award periods it relates to, go to .

If you cannot determine what the change is or which award period the change relates to, go to .

Step 3

Establish if the change is a request to backdate where backdating was auto inhibited and a backdating request has been made out of time (a late request for backdating), these cases can be amended under official error.

If it is and the change is for UY, go to  

If it is and the change relates to UY-1, follow the guidance in TCM0042280 

Note: Claims are inhibited from backdating on

  • WTC only awards where no job start date has been provided
  • WTC self-employed claims, even if a job start date has been provided, the tax credits computer does not pick this up
  • the claim has a benefit marker
  • WTC and CTC claims where a job start date has been provided. The tax credits system will auto backdate to the job start date but not the full 31 days even if entitlement exists for CTC. For example, if someone starts work one month before making the claim but their child is six months old, the claim will only be backdated to the job start date even though entitlement exists for CTC before this date.

Note: From 06/04/2012 backdating rules changed so that claims could only be backdated a maximum of 31 days. Prior to 06/04/2012 backdating of claims was for a maximum of 93 days.

If it is not a request to backdate, go to .

Step 4

Check household notes to see if the change has already been made or has previously been considered. For how to do this, use TCM1000067.

If the change has already been made or has previously been considered

  • update household notes with the message TE01 from TCM0174020. For how to do this, use TCM1000001 
  • send correspondence to storage. Follow the guidance in TCM0074140 
  • take no further action.

If the change has not already been made or has not previously been considered, go to  

If the change has not been made but has previously been considered and the customer is providing additional information, go to .

Step 5

Check to see if all the details of the change has been provided.

If all the details of the change have been provided, go to  

If all the details of the change have not been provided, go to .

Step 6

Check household notes to see if the missing information has been provided. For how to do this, use TCM1000067.

If you obtain the missing information, go to  

If you cannot find the missing information, go to .

Step 7

Contact the customer by telephone. Follow the guidance in TCM0094080.

If you are able to contact the customer by phone and obtain the missing information, go to  

If the customer cannot be contacted by phone, or contact was unsuccessful

  • issue form TC664 to the customer asking for the missing information
  • set a clerical BF date of 15 days in the future
  • complete form TC648 with the customer’s details
  • update household notes with the message TE02 
  • take no further action.

Step 8

Check if the information that has been requested on the TC664 has been recorded in Household Notes. For how to do this, use TCM1000067 

If the missing information is recorded in household notes, go to  

If the missing information has not been recorded in household notes, go to .

Step 9

Check household notes to see if a reminder has been issued.

If a reminder has not been issued

  • issue form TC664R to the customer
  • set as clerical bf date of 15 days in the future
  • update form TC648
  • update household notes with message TE03 

If a reminder TC664R has been issued and there has been no response, follow the guidance in TCM0054060.

Step 10

Check the status of the In Year Finalisation. For how to do this, use TCM1000594 

If the status of the In Year Finalisation is finalised, go to  

If the status of the In Year Finalisation is not finalised, go to .

Step 11

Check to see if the change is for either the customer’s or child’s date of birth or notification of the death of a customer or child

If the change is for a child’s date of birth and the change is for UY

  • apply the change. Follow the appropriate Changes guidance

If the change is for a customer’s date of birth or child’s date of birth for UY or earlier and you are dealing with a worklist, do not make the change

  • transfer the work item to the ‘Mismatches IN’ MU. Use TCM0322460 for the correct MU number

If the change is for a customer’s date of birth or child’s date of birth for UY or earlier and you are not dealing with a worklist, do not make the change

  • complete an M1 referral form (Word 78KB) and post it with the attachments to the TCO area detailed on the referral

If you are dealing with the death of the customer or child and not dealing with a worklist item

  • complete a form TC648 and post with any attachments to TCO (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  
  • take no further action

If you are dealing with the death of the customer or child and you are dealing with a worklist item

  • transfer the work item to the ‘DOD INDICATOR IN’ MU. Use TCM0322460 for the correct MU number

If the change is not for either a customer or child’s date of birth or notification of the death of a customer or child, go to .

Step 12

Check to see if the change is an income change

If the change is not an income change

  • make the change following the relevant changes guidance
  • take no further action

If the change is an income change

  • check if the Award Declaration has been issued. For how to do this, use TCM1000591 
  • go to .

Step 13

If the Award Declaration has been issued, go to  

If the Award Declaration has not been issued

  • contact the customer. For how to do this use, TCM0094080

If the customer can be contacted by phone

  • tell the customer they should receive their Award Declaration within the next 2 weeks and that they will need to add their income details to the Award Declaration
  • to make their Award Declaration when they get the form they can either phone the Helpline and complete the declaration over the phone or complete the declaration and return it in the envelope provided

If the customer cannot be contacted by phone

  • issue TC1156
  • take no further action.

Step 14

Check to see if the corresponding not served box has been selected

If the not served box has been selected

  • tell the customer they should receive their Award Declaration within the next 2 weeks and that they will need to add their income details to the Award Declaration.
  • to make their Award Declaration when they get the form they can either phone the Helpline and complete the declaration over the phone or complete the declaration and return it in the envelope provided.
  • take no further action.

If the not served box has not been selected, go to .

Step 15

Check if the Award Declaration has been received. For how to do this, use TCM1000587.

If the Award Declaration has been received

  • make the change in function Capture In Year S17 Finalisation. For how to do this, use TCM1000593 
  • update household notes with the message TE05 
  • take no further action.

If the Award Declaration has not been received, go to .

Step 16

Check to see if the Award Declaration is a Reply Required or Auto Finalisation, for how to do this, use TCM1000585.

If the Award Declaration is a Reply Required

  • make the change in function Capture In Year S17 Finalisation
  • update household notes with the message TE05 
  • take no further action.

If the IY Declaration is an Auto, go to  

Step 17

Check to see if the income being provided is within the bandings.

If the income is within the bandings

  • tell the customer we will automatically finalise their claim as their income is within the bandings and therefore it does not impact on their entitlement
  • take no further action.

If the income is not within the income bands

  • make the change in function Capture In Year S17 Finalisation
  • update household notes with the message TE05 
  • take no further action.

Step 18

Check to see if today’s date is after the customer’s IYSD. For how to do this, use TCM1000590 

If today’s date is after the customer’s IYSD, go to  

If today’s date is before the customer’s IYSD

  • contact the customer by telephone. Follow the guidance in TCM0094080 

If you are able to contact the customer by phone confirm that the information is still correct, go to  

If the customer cannot be contacted by phone, or contact was unsuccessful, go to .

Step 19

Check to see if there are at least 4 working days between today’s date and the IYSD. For how to do this, use TCM1000590 

If there are at least 4 working days between today’s date and the IYSD 

  • issue form TC664 to the customer asking for the missing information
  • set a clerical BF date of 15 days in the future
  • complete form TC648 with the customer’s details
  • update household notes with the message TE04 
  • take no further action.

If there is not at least 4 working days between today’s date and the IYSD, go to .

Step 20

Check if the information that has been requested on the TC664 has been recorded in Household Notes. For how to do this, use TCM1000067 

If the missing information is recorded in household notes, go to  

If the missing information has not been recorded in household notes, go to .

Step 21

Check to see if a reminder has been issued.

If a reminder has not been issued 

  • issue form TC664R to the customer
  • set as clerical bf date of 15 days in the future
  • update form TC648
  • update household notes with message TE03 

If a reminder TC664R has been issued and there has been no response, follow the guidance in TCM0054060.

Step 22

Check household notes to see if the change was received after the declaration was received and on or before the customers IYSD. For how to do this use TCM1000590 and TCM1000587.

Note: Auto cases do not have a received date. In these cases, you must check if the details of the change were received before IYSD.

If the change was received after the declaration was received and or before the IYSD

  • make the change following the relevant changes guidance

Note: where the CoCs is an income change, it must be applied in function Maintain IY Finalisation

  • update household notes with the message TE05 
  • send correspondence to storage. Follow the guidance in TCM0074140 
  • take no further action

If the change was received after the declaration was received and after IYSD, go to .

Step 23

Is the customer reporting a new income figure?

If the customer is reporting a new income figure

  • make a note of the UY and UY-1 income figures
  • go to  

If the customer is not reporting a new income figure, go to .

Step 24

Check to see if the new income figure being reported is now lower than what was originally reported.

If the income figure is now lower, go to  

If the income figure is not lower, go to .

Step 25

Is the income figure used to finalise the UY award lower than the UY-1 income figure?

If the UY income figure used to finalise the award is lower than the UY-1 income figure, go to  

If the UY income figure used to finalise the award is not lower than the UY-1 income figure, go to .

Step 26

If the income now being reported for UY has increased by more than £5,000 when compared to the UY-1 income figure, go to  

If the income now being reported for UY has not increased by more than £5,000 when compared to the UY-1 income figure, go to .

Step 27

Has the customer reported any non-income related changes?

If the customer has reported any non-income related changes, go to  

If the customer has not reported any non-income related changes, go to the ‘If there is no impact on UY entitlement’ bullet in .

Step 28

Use the SEES Tax Credits Entitlement Calculator to identify if all the changes would cause an increase, decrease or no impact on the UY award. For how to do this, use TCM1000089 

  • enter all the changes in the SEES Tax Credits Entitlement Calculator to calculate an adjusted UY award

Note: You must make sure that you enter the correct annualised income figure.

  • print a copy and retain it with the casepapers
  • compare the UY entitlement on the computer with the adjusted UY entitlement on the SEES calculation
  • go to .

Step 29

From the comparison, identify if UY entitlement has increased, decreased or whether there is no impact on the UY entitlement.

If there is an increase in the UY award, and the changes result in the disability element or severe disability element for the customer and/or children being backdated and paid in a period covered by the finalised UY award, follow the guidance in TCM0042200 

If there is an increase in the UY award, and the change does not result in the disability element or severe disability element for the customer and/or children being backdated and paid in a period covered by the finalised UY award, go to  

If there is a decrease in the UY award, go to  

If there is no impact on the UY entitlement

  • apply the manual correspondence marker. For how to do this, use TCM1000063 
  • apply the change following the appropriate changes guidance
  • update household notes with the message TE05 
  • take no further action.

Step 30

If the cause of the change is not yet clear but the customer indicates an HMRC error or it appears that HMRC has made a mistake, go to .

If the customer has notified HMRC of the change and is not indicating HMRC error

  • update household notes with the message TE09 
  • send form TC960 to the customer

Note: Where reduced UY income is reported after UY has been finalised you must include the option on the form TC960 telling the customer of their appeal rights.

Note: When completing the form TC960 for auto cases, the issue date of the final decision notice is the date the Award Declaration was issued. This can be viewed on the Current Position screen in Function View In Year S17 Details.

  • take no further action.

Step 31

If the cause of the change is not yet clear but the customer indicates an HMRC error or it appears that HMRC has made a mistake, go to  

If the customer is not indicating HMRC error, go to .

Step 32

Check to see if the Award Declaration was received. For how to do this, use TCM1000587 

If the Award Declaration was captured by phone, this indicates that it was captured by Contact Management Application (CMA)

  • liaise with area’s CMA representative to access and read the appropriate phone call records
  • listen to the relevant calls to determine if an official error has occurred
  • go to  

If the Award Declaration was captured by RDC, paper or interview

  • request the Award Declaration or correspondence from storage. Follow the guidance in TCM0074060 
  • update household notes with the message TE06 
  • take no further action.

Step 33

If there was an increase in the UY award, go to  

If there was a decrease in the UY award, go to .

Step 34

Based on the information provided on the latest Award Declaration received from the customer or IY change, has an official error occurred?

Note: See official error for the two criteria that must be met.

For example: Customer started work on 05/05/2013. The change was notified on 01/06/2013 and today’s date is 01/08/2013. The computer will automatically restrict the date in the Include From Date field to 01/07/2013. You will have to calculate the one calendar month before the date the change was reported. In this case, you will have to change the date in the Include From Date field to 05/05/2013.

If official error has been established

  • apply the change following the appropriate Changes guidance

If the message ‘S18 Refinalisation Rules - Potential inappropriate refinalisation for CCYY-CCYY. If you have the authority to refinalise under S19, S20 or S21 of the Tax Credit Act 2002 or due to an appeal decision. Press OK to process the change or Cancel’ displays 

  • the changes you are making will re-finalise the claim, ensure you have followed this guidance correctly before making any changes
  • update household notes with the message TE05 
  • take no further action.

If the message ‘S18 Refinalisation Rules - You do not have the authority to re-finalise CCYY-CCYY. This change will not be accepted. Please refer to the appropriate team’ displays 

  • the changes you are making will re-finalise the claim
  • select Cancel. You will be taken to the Amend Application Details screen
  • select Cancel
  • the message ‘All changes to the application will be lost for this session, do you wish to proceed?’ will display, select Yes
  • pass the case to a Level 2 User or your manager. For more information, use ‘Level 1 and Level 2 users’ on TCM0320260 
  • take no further action.

If official error has not been established, or there is no evidence to support an official error having occurred

  • update household notes with the message TE09 
  • send form TC960 to the customer

Note: Where reduced UY income is reported after UY has been finalised you must include the option on the form TC960 telling the customer of their appeal rights.

Note: When completing the form TC960 for auto cases, the issue date of the final decision notice is the date the Award Declaration was issued. This can be viewed on the Current Position screen in Function View In Year S17 Details.

  • take no further action.

Step 35

Following your investigations at and , you are now able to determine if the change is needed because of a mistake by HMRC.

If the change is due a mistake by HMRC, go to  

If the change is not due to a mistake by HMRC, go to .

Step 36

If the change is for the UY income

  • apply the manual correspondence marker. For how to do this, use TCM1000063 
  • apply the change following the appropriate changes guidance
  • update household notes with the message TE05 

If the message ‘S18 Refinalisation Rules - Potential inappropriate refinalisation for CCYY-CCYY. If you have the authority to refinalise under S19, S20 or S21 of the Tax Credit Act 2002 or due to an appeal decision. Press OK to process the change or Cancel’ displays 

  • the changes you are making will re-finalise the claim, ensure you have followed this guidance correctly before making any changes
  • update household notes with the messages TE10 and TE11 
  • set a clerical BF for 24 hours then
  • go to  

If the message ‘S18 Refinalisation Rules - You do not have the authority to re-finalise CCYY-CCYY. This change will not be accepted. Please refer to the appropriate team’ displays 

  • the changes you are making will re-finalise the claim
  • select Cancel. You will be taken to the Amend Application Details screen
  • select Cancel
  • the message ‘All changes to the application will be lost for this session, do you wish to proceed?’ will display, select Yes
  • pass the case to a Level 2 User or your manager. For more information, use ‘Level 1 and Level 2 users’ on TCM0320260 
  • go to  

If the change is not for the UY income

  • update household notes with the message TE09 
  • send form TC960 to the customer

Note: Where reduced UY income is reported after UY has been finalised you must include the option on the form TC960 telling the customer of their appeal rights.

Note: When completing the form TC960 for auto cases, the issue date of the final decision notice is the date the Award Declaration was issued. This can be viewed on the Current Position screen in Function View In Year S17 Details

  • take no further action.

Step 37

Remit the overpayment arising from the correction in the UY award up to the date HMRC become aware of the error.

Check to see if there is a suspension marker on the claim

If any suspension markers have been selected

  • lift the suspension
  • then follow the guidance in TCM0230060. Use code 5B Official Error
  • take no further action

If no suspension markers have been selected

  • then follow the guidance in TCM0230060. Use code 5B Official Error
  • take no further action.

Step 38

Based on the SEES calculation, check to see if the UY entitlement has decreased by more than £100.00.

If the UY entitlement has decreases by more than £100.00, go to  

If the UY entitlement has not decreased by more than £100.00

  • update household notes with the message TE09 
  • send form TC960 to the customer

Note: Where reduced UY income is reported after UY has been finalised you must include the option on the form TC960 telling the customer of their appeal rights.

Note: When completing the form TC960 for auto cases, the issue date of the final decision notice is the date the Award Declaration was issued. This can be viewed on the Current Position screen in Function View In Year S17 Details.

  • take no further action.

Step 39

Check to see if the Priority 1 CoC Team are currently working the enquiry.

If the Priority 1 CoC Team are working the enquiry and you are not dealing with a worklist item

  • send any correspondence to (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  
  • update household notes with the message TE07 or TE08 
  • take no further action.

If the Priority 1 CoC Team are working the enquiry and you are dealing with a worklist item

  • transfer the worklist item to the ‘DOD INDICATOR IN’ MU. Use TCM0322460 for the correct MU number
  • take no further action

If the Priority 1 CoC Team are not working the enquiry

  • send a referral to S19 team for the change to be considered
  • take no further action.