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HMRC internal manual

Tax Credits Manual

Stopping Tax Credits - Complex: In Year Finalisation Income Check

Checklist

Before you follow this guidance, make sure

  • you follow the guidance in TCM0138020
  • you follow the guidance in TCM0346560
  • you are in the correct MU. Use TCM0322460 for the correct MU number
  • you have access to the Access to DWP Data (ADD) system
  • you have access to Real Time Information (RTI).

Background

A case with a Complex marker will create a worklist item on the Unfinalised In Year S17 worklist. Processing will not continue until the following checks have been completed

  • a validity check
  • a completeness check
  • a compatibility check
  • an RTI compatibility check.

The case will then need to be Manage Finalised.

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.

Step 1

If you are dealing with new case, go to Step 2.

If you are dealing with a returned TC664IYF, go to Step 23.

If you are dealing with an expired TC664IYF BF, go to Step 33.

If you are dealing with a returned TCC50, go to Step 35.

If you are dealing with an expired TCC50 BF, go to Step 36.

Step 2

Access Household Notes to check whether a Loss of Benefit Sanction has been applied. For how to do this use TCM1000067. Make a note of the sanction period.

Note: a Loss of Benefit Sanction can be identified by the UB24 Household Note which will show you the period that the sanction has been applied.

Note: Loss of Benefit Sanctions are penalties that are applied where a customer or their partner have been convicted of a benefit fraud offence or accepts an administrative penalty for such an offence.

If there is no Loss of Benefit Sanction, go to Step 3.

If the Loss of Benefit Sanction period ends before the UC start date, go to Step 3.

If the Loss of Benefit Sanction period ends after the UC start date

  • send a MGP1c referral including the tax credits stop date and the UC start date to the Loss of Benefit Sanction team inbox informing them of the date that the customer claimed Universal Credit (UC)
  • go to Step 3.

Step 3

Check whether the Non Taxable Social Security Benefit information present on the IYS17 and in Application Correction match. For how to do this, use TCM1000571 and TCM1000005.

If Non Taxable Social Security Benefit information is present on the IYS17 but not in Application Correction, go to Step 4.

If Non Taxable Social Security Benefit information is present in Application correction but not in the IYS17, go to Step 4.

If Non Taxable Social Security Benefit information is present on both IYS17 and in Application Correction, go to Step 4.

If Non Taxable Social Security Benefit information is not present on either the IYS17 or in Application Correction, go to Step 5.

Step 4

Access ADD and check whether there is a Non Taxable Social Security Benefit claim for the UY period.

Note: the UY period runs from 06/04/CY to the tax credits stop date.

Note: Non Taxable Social Security Benefits include IS, Jobseekers Allowance (Income Based) and Employment Support Allowance (Income Based).

If ADD shows a live Non Taxable Social Security Benefit claim for the whole of the UY period

  • update the IYS17 None Taxable Social Security Benefit checkbox if appropriate. For how to do this, use TCM1000606
  • go to Step 21.

If ADD does not show a live Non Taxable Social Security Benefit claim for the whole of the UY period

  • uncheck the Non Taxable Social Security Benefit in the IYS17. For how to do this, use TCM1000606
  • go to Step 5.

Step 5

Check whether Self-Employed details are present in Application Correction. For how to do this, use TCM1000005.

If Application Correction indicates the customer is Self-Employed, go to Step 6.

If Application Correction does not indicate the customer is Self-Employed, go to Step 9.

Step 6

Check whether Self-Employed income is included in the IYS17. For how to do this, use TCM1000571.

Note: if the customer has supplied a figure ‘0’ on their form, this is treated as an income figure being supplied.

If the IYS17 includes correctly formatted Self-Employed income, go to Step 7.

If the IYS17 does not include correctly formatted Self Employed Income

  • make a note you will need to contact the customer and confirm their Self-Employed income for the UY period
  • go to Step 9.

Step 7

Check whether PY Self Employed income is held in Application Correction. For how to do this, use TCM1000005.

If PY Self Employed income is present, go to Step 8.

If PY Self Employed income is not present, go to Step 9.

Step 8

Check whether the Self-Employed income included in the IYS17 falls within the daily rate income thresholds. For how to do this, use TCM1000610 and TCM1000611.

If the Self-Employed income included in the IYS17 falls within the income threshold, go to Step 9.

If the Self-Employed income included in the IYS17 does not fall within the income threshold

  • make a note you will need to contact the customer and confirm their Self-Employed income for the UY period
  • go to Step 9.

Step 9

Check whether Employed details are present in Application Correction. For how to do this, use TCM1000005.

Note: there may be scenarios where a 4 week run on has been applied in PY which makes the customer appear as employed in UY. In these scenarios you must treat the customer as not being employed.

If Application Correction indicates the customer is employed, go to Step 10.

If Application Correction indicates the customer is not employed, go to Step 14.

Step 10

Check whether Employed income is included in the IYS17. For how to do this, use TCM1000571.

Note: if the customer has supplied a figure ‘0’ on their form, this is treated as an income figure being supplied.

If the IYS17 includes correctly formatted Employed income, go to Step 11.

If the IYS17 does not include correctly formatted Employed income, go to Step 13.

Step 11

Check whether there is Employed income for the customer held on RTI for the UY period. For how to do this, use TCM1000505.

If RTI holds employed income for the customer for the UY period, go to Step 12.

If RTI does not hold employed income for the customer for the UY period, go to Step 14.

Step 12

Check whether the IYS17 employed income is with RTI tolerance. For how to do this, use TCM1000612.

Note: for a list of allowable deductions to income, follow the guidance in TCM0322175.

If the IYS17 employed income is within RTI tolerances, got to Step 14.

If the IYS17 employed income is not within RTI tolerances

  • make a note you will have to contact the customer and request an explanation as to why the employed income they have provided differs from RTI.
  • go to Step 14.

Step 13

Check whether there is Employed income for the customer held on RTI for the UY period. For how to do this, use TCM1000505.

If RTI holds employed income for the customer for the UY period

  • make a note you will need to update the IYS17 with RTI employed income
  • go to Step 14.

If RTI does not hold employed income for the customer for the UY period

  • make a note you will have to contact the customer and request employed income for the UY period
  • go to Step 14.

Step 14

Check whether there is Benefits in Kind income for the customer held on RTI for the UY period. For how to do this, use TCM1000505.

If RTI holds Benefit in Kind income for the customer for the UY period, go to Step 15.

If RTI does not hold Benefit in Kind income for the customer for the UY period, go to Step 16.

Step 15

Check whether Benefits in Kind income is present and within tolerance of the RTI data.

Note: if the customer has supplied a figure ‘0’ on their form, this is treated as an income figure being supplied.

If Benefits in Kind income is present on the IYS17 and within tolerance, go to Step 16.

If Benefits in Kind income is present on the IYS17 and is outside of tolerance

  • make a note you will have to contact the customer and request an explanation as to why the Benefits in Kind income they have provided differs from RTI.
  • go to Step 16.

If Benefits in Kind income is not present on the IYS17

  • make a note you will need to update the IYS17 with RTI Benefits in Kind income
  • go to Step 16.

Step 16

Check whether Taxable Social Security Benefit income is present in the IYS17 and Application Correction match. For how to do this, use TCM1000005.

Note: if the customer has supplied a figure ‘0’ on their form, this is treated as an income figure being supplied.

If correctly formatted Taxable Social Security Benefit information is present on the IYS17 but not in Application Correction, go to Step 17.

If correctly formatted Taxable Social Security Benefit information is present in Application correction but not in the IYS17, go to Step 18.

If correctly formatted Taxable Social Security Benefit information is present on both IYS17 and in Application Correction, go to Step 17.

If correctly formatted Taxable Social Security Benefit information is not present on either the IYS17 or in Application Correction, go to Step 19.

Step 17

Check whether the Taxable Social Security Benefit income held on the IYS17 is within tolerance of data held on ADD. For how to do this, use TCM1000638.

Note: for a list of Taxable Social Security Benefits, use TCTM04403.

If ADD holds Taxable Social Security Benefit and the IYS17 Taxable Social Security Benefit income is within tolerance, go to Step 19.

If ADD holds Taxable Social Security Benefit and the IYS17 Taxable Social Security Benefit income is not within tolerance

  • make a note you will have to contact the customer and request an explanation as to why the Taxable Social Security Benefit income they have provided differs from data we hold
  • go to Step 19.

If ADD does not hold Taxable Social Security Benefit income for the UY period

  • make a note you will need to update the IYS17 with £0 for Taxable Social Security Benefits
  • go to Step 19.

Step 18

Check whether there is Taxable Social Security Benefit income for the customer held on ADD for the UY period.

If ADD holds Taxable Social Security Benefit income for the UY period

  • calculate the total Taxable Social Security Benefits paid for the UY period.

Note: for a list of Taxable Social Security Benefits, use TCTM04403.

  • make a note you will need to update the IYS17 with the total Taxable social Security Benefits paid for the UY period. For how to do this, use TCM1000606.
  • go to Step 19.

If ADD does not hold Taxable Social Security Benefit income for the UY period

  • make a note you will need to update the IYS17 with £0 for taxable social security benefits
  • go to Step 19.

Step 19

Check whether there is Other Household Income for the customer held on RTI for the UY period. For how to do this, use TCM1000505.

Note: for a list of Other household Income types, see TCM0120020.

If RTI holds Other Household Income for the customer for the UY period, go to Step 20.

If RTI does not hold Other Household Income for the customer for the UY period, go to Step 21.

Step 20

Check whether Other Household Income is present and within tolerance of the RTI data.

Note: if the customer has supplied a figure ‘0’ on their form, this is treated as an income figure being supplied.

If Other Household Income is present on the IYS17 and within tolerance, go to Step 21.

If Other Household Income is present on the IYS17 and is outside of tolerance

  • make a note you will have to contact the customer and request an explanation as to why the Other Household Income they have provided differs from RTI.
  • go to Step 21.

If Other Household Income is not present on the IYS17

  • make a note you will need to update the IYS17 with RTI Other Household Income
  • go to Step 21.

Step 21

Check your notes to determine whether you need to contact the customer

If you need to contact the customer, go to Step 22.

If you do not need to contact the customer

  • set the IYSD to tomorrow’s date. For how to do this, use TCM1000579
  • update the IYS17 if required
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household notes with the message TU01 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

Step 22

Contact the customer by telephone to confirm all required information. For how to do this follow the guidance in TCM0094080.

Note: for a list of allowable deductions to income, follow the guidance in TCM0322175.

If you were able to contact the customer

  • make a note that you will need to update the IYS17 with the updated details the customer has supplied
  • go to Step 28.

If you were unable to contact the customer, or were unable to obtain all required information from the customer

  • complete and send a TC664IYF requesting details of all earnings/benefit figures. For how to do this, use TCM1000124
    Note: Select the extra question paragraph and input the following question to cover any possible discrepancy that the customer will need to explain

    “Your employer / pension provider (delete as appropriate) has told us your employed / pension income figure was £XXXX for the period 06/04/YYYY to DD/MM/YYYY. (UY period)
    You have told us that your employed / pension income figure was £XXXX for the period 06/04/YYYY to DD/MM/YYYY. (UY period)
    We need you to tell us why there is a difference between these two income figures and provide your final payslip issued prior to DD/MM/YYYY or bank statement covering the period 06/04/YYYY to DD/MM/YYYY (UY period) to support your income figure.
    To help you work out the reason for the difference between the income provided by you and your employer / pension provider, some of the most common reasons are because:

  • you paid into a pension scheme
  • you deducted maternity pay or adoption pay
  • you deducted paternity pay
    For more information about deductions that you can make from your income for tax credits purposes, please visit www.gov.uk/browse/benefits/tax-credits
    If we do not hear from you we may process your award using the information we hold.”
     
  • set an action date for 30 days in the future. For how to do this, use TCM1000008
  • transfer the work item to the ‘Unfinalised IYS17 BF’ MU. Use TCM0322460 for the correct MU number. For how to do this, use TCM1000023
  • update Household notes with the message TU02 from TCM0174020. For how to do this, use TCM1000001
  • take no further action.

Step 23

Check your notes to determine the reason for customer contact.

If you contacted the customer due to a blank income field, go to Step 24.

If you contacted the customer because the IYS17 employed income or other income amount is outside the RTI threshold, go to Step 25.

If you contacted the customer due to an incorrectly formatted income field, go to Step 27.

Step 24

Check the information provided.

If the customer has provided a replacement income figure

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income figure in ‘Capture In Year Details’. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU19 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If the customer has not provided a replacement income figure

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income field with RTI data where available, otherwise enter £0. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU31 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

Step 25

Check the information provided.

If the customer has provided a replacement income figure, go to Step 26.

If the customer has not provided a replacement income figure

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income / other income figure on the IYS17 with the RTI figure. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • issue a TC2001 from SEES. For how to do this, use TCM1000124
  • update Household Notes with the message TU10 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

Step 26

Check whether the customer has given us a satisfactory explanation as to why their income / other income details are different from the figures supplied by their employer / pension provider.

Note: This could be because the customer pays into a pension scheme, or they have deducted maternity, adoption or paternity pay. They may also have made gift aid contributions. This is not a complete list. Follow the guidance in TCM0322175 for a list of allowable deductions from income.

If you are satisfied with the explanation the customer has provided

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income / other income figure on the IYS17 with the customer supplied figure. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU11 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If you are not satisfied with the explanation the customer has provided

  • issue a TCC50 requesting further evidence. For how to do this, use TCM1000124
  • update Household Notes with the message TU32 from TCM0174020. For how to do this, use TCM1000001
  • set an action date for 30 days in the future. For how to do this, use TCM1000008
  • take no further action.

Step 27

Check whether the customer has provided an acceptable income figure.

If the customer has provided an acceptable income figure

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income figure in ‘Capture In Year Details’. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU17 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If the customer has not provided an acceptable income figure

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • remove the unacceptable income figure in ‘Capture In Year Details’. For how to do this, use TCM1000600
  • update the income field with RTI data where available, otherwise enter £0. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU18 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

Step 28

Check your notes to determine the reason for customer contact.

If you contacted the customer due to a blank income field, go to Step 29.

If you contacted the customer because the IYS17 employed income amount is outside the RTI threshold, go to Step 30.

If you contacted the customer due to an incorrectly formatted income field, go to Step 32.

Step 29

Check the information provided.

If the customer has provided a replacement income figure

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income figure in ‘Capture In Year Details’. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU33 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If the customer has not provided a replacement income figure, go back to Step 22.

Step 30

Check the information provided.

If the customer has provided a replacement income figure, go to Step 31.

If the customer has not provided a replacement income figure, go back to Step 22.

Step 31

Check whether the customer has given us a satisfactory explanation as to why their income / other income details are different from the figures supplied by their employer / pension provider.

Note: This could be because the customer pays into a pension scheme, or they have deducted maternity, adoption or paternity pay. They may also have made gift aid contributions. This is not a complete list. Follow the guidance in TCM0322175 for a list of allowable deductions from income.

If you are satisfied with the explanation the customer has provided

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income / other income figure on the IYS17 with the customer supplied figure. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU07 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If you are not satisfied with the explanation the customer has provided

  • issue a TCC50 requesting further evidence. For how to do this, use TCM1000124
  • update Household Notes with the message TU34 from TCM0174020. For how to do this, use TCM1000001
  • set an action date for 30 days in the future. For how to do this, use TCM1000008
  • take no further action.

Step 32

Check whether the customer has provided an acceptable income figure.

If the customer has provided an acceptable income figure

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income figure in ‘Capture In Year Details’. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU35 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If the customer has not provided an acceptable income figure, go back to Step 22.

Step 33

Check Household Notes to determine whether the customer has provided the required information by phone. For how to do this, use TCM1000067.

If the customer has provided the required information by phone, go back to Step 23.

If the customer has not provided the required information by phone, go to Step 34.

Step 34

Check your notes to determine the reason for customer contact.

If you contacted the customer due to a blank income field

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income field with RTI data where available, otherwise enter £0. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU31 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If you contacted the customer because the IYS17 employed income or other income amount is outside the RTI threshold

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income / other income figure on the IYS17 with the RTI figure. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • issue a TC2001 from SEES. For how to do this, use TCM1000124
  • update Household Notes with the message TU10 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If you contacted the customer due to an incorrectly formatted income field

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • remove the unacceptable income figure in ‘Capture In Year Details’. For how to do this, use TCM1000600
  • update the income field with RTI data where available, otherwise enter £0. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU18 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

Step 35

Check whether the customer has given us a satisfactory explanation as to why their income / other income details are different from the figures supplied by their employer / pension provider.

Note: This could be because the customer pays into a pension scheme, or they have deducted maternity, adoption or paternity pay. They may also have made gift aid contributions. This is not a complete list. Follow the guidance in TCM0322175 for a list of allowable deductions from income.

If you are satisfied with the explanation the customer has provided

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income / other income figure on the IYS17 with the customer supplied figure. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • update Household Notes with the message TU07 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

If you are not satisfied with the explanation the customer has provided

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income / other income figure on the IYS17 with the RTI figure. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • issue a TC2001 from SEES. For how to do this, use TCM1000124
  • update Household Notes with the message TU05 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

Step 36

Process the declaration using the RTI figure.

  • set the IYSD to tomorrows date. For how to do this, use TCM1000579
  • update the income / other income figure on the IYS17 with the RTI figure. For how to do this, use TCM1000600
  • finalise the declaration. For how to do this, use TCM1000573
  • issue a TC2001 from SEES. For how to do this, use TCM1000124
  • update Household Notes with the message TU05 from TCM0174020. For how to do this, use TCM1000001
  • go to Step 37.

Step 37

Check whether the worklist item is still showing on the Unfinalised In Year S17 worklist with a reason other than CMPLX. For how to do this, use TCM1000409.

If the worklist item is still showing on the Unfinalised In Year S17 worklist, follow the guidance in TCM0380015

If the worklist item is not showing on the Unfinalised In Year S17 worklist

  • you will need to annualise the income figures used to finalise the UY award. For how to do this, use TCM1000462
  • complete a manual TC602 using the annualised income figure and UY date range
    Note: when completing the manual TC602, be sure to include information received in the TC828 if returned by the customer.
  • go to Step 38.

Step 38

Check whether any UY debt was identified or PY debt that has not been transferred to EMTP.

If UY debt only has been identified

  • update Household Notes with the message TU37 from TCM0174020 to record the amount of UY debt identified.  For how to do this, use TCM1000001
  • remit the outstanding debt using remission code 13. For how to do this, use TCM0230060
  • set a clerical BF of 30 days to allow the UY debt to become stable, then follow the guidance in TCM0380025

If PY debt only has been identified, follow the guidance in TCM0380025.

If PY and UY debt has been identified

  • update Household Notes with the message TU37 from TCM0174020 to record the amount of UY debt identified.  For how to do this, use TCM1000001
  • remit the outstanding UY debt using remission code 13. For how to do this, use TCM0230060
  • set a clreical BF of 30 days to allow the UY debt to become stable, then follow the guidance in TCM0380025.

If no debt has been identified, take no further action.