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HMRC internal manual

Tax Credits Manual

How to check if customer’s postcode is in a closed postcode area

Background

To support the expansion of Universal Credit (UC), The Department of Work and Pensions (DWP) are undertaking a phased rollout approach using postcodes. This means that new claims for Tax Credit will no longer be accepted in certain parts of the country.

As part of this Geographic Step Closure (GSC) all new Tax Credit claims will be checked to determine whether the customer(s) is/are living in a postcode area which is closed off to new claims. Once identified, these claims will be rejected and HMRC will signpost the customer(s) towards DWP to claim UC. The exception to this is if the customer (or in the case of a joint claim, one of the customers) is recognised as being of Pension Credit Qualifying Age (PCQA). Business rules will identify these customers and their claim will be accepted.

Note: From 6 April 2017, an additional exception has been introduced to allow any customer with more than 2 children to claim tax credits despite living in a closed postcode area.  

Step 1

On the ‘Function Menu’

  • select ‘Application’ on the tool bar
  • select ‘UC Postcode Checker’ from the options available
  • go to Step 2.

Step 2

In the ‘UC Postcode Checker’ screen

  • enter the postcode provided for Applicant 1 in the ‘Postcode 1’ field.
  • select ‘OK’
  • go to Step 3.

Note: Where you are considering a joint claim, and where the addresses are different, you will also have to enter the postcode provided for applicant 2 in the ‘Postcode 2’ field.  Again, select ‘OK’

Note: Where the postcode entered cannot be located it will be regarded as ‘Open’

Step 3

Note: The ‘Reference Date’ field will always pre-populate with the current date

Note: The ‘Reference Date’, if entered, must be today or earlier. Where a future date is entered this will be classed as invalid and the warning message ‘Date must not be in the future’ will be displayed

If you are checking tax credit eligibility for the current date or the claim received date is the same as the current date

If you are checking tax credit eligibility for an earlier date or the claim received date is earlier than the current date

  • enter a date in the ‘Reference Date’ field
  • select ‘OK’
  • go to Step 4.

Step 4

If the ‘Closure Date’ is populated and there is a tick in the ‘Closed’ box

If the ‘Closure Date’ does not populate and the ‘Open’ signal appears

  • the customer(s) is/are entitled to claim tax credit
  • go to Step 6.

If the ‘Closure Date’ is populated and there is a tick in the ‘Due to close in 21 days’ box

  • the customer(s) is/are entitled to claim tax credit
  • go to Step 10.

Note: Where you are considering a joint claim, and where the addresses are different, if one postcode is ‘Closed’ and one is ‘Open’ then tax credit will be considered closed unless exceptions to business rules apply.

Step 5

You will need to check if exceptions to business rules apply

Note: Exceptions are where at least one of the customers is of Pension Credit Qualifying Age (PCQA) or where there are more than 2 children or qualifying young persons being claimed for.

You will need to check if the customer(s) is of PCQA. You can do this via the gov.uk calculator. This can be found at 

If the customer(s) is of PCQA

  • the customer(s) is entitled to claim tax credit
  • go to Step 6.

If the customer(s) is not of PCQA

  • the customer(s) is not entitled to claim tax credit
  • go to Step 7.

Step 6

If you are using this ‘How to’ in conjunction with guidance

  • you will need to return to that guidance to complete your action

If you are not using this ‘How to’ in conjunction with guidance

  • take the relevant action

Step 7

Check if the customer(s) is claiming for any children or qualifying young persons

If the customer(s) is claiming for any children or qualifying young persons

If the customer is not claiming for any children or qualifying young persons

  • the customer(s) is not entitled to claim tax credit
  • go to Step 9

Step 8

You will need to check how many children or qualifying young persons are being claimed for.

If the customer(s) is claiming for more than 2 children or qualifying young persons

  • the customer(s) is entitled to claim tax credit
  • go back to Step 6.

If the customer(s) is not claiming for more than 2 children or qualifying young persons

  • the customer(s) is not entitled to claim tax credit
  • go to Step 9.

Step 9

If you are using this ‘How to’ in conjunction with guidance

  • you will need to return to that guidance to complete your action

If you are not using this ‘How to’ in conjunction with guidance

  • advise the customer(s) that Universal Credit is a new benefit that is replacing a range of existing benefits including tax credit
  • advise the customer that Universal Credit has replaced Tax Credit in their postcode area
  • advise the customer that we cannot send them a tax credits claim pack
  • direct the customer to gov.uk to claim Universal Credit
  • take no further action.

Step 10

If you are using this ‘How to’ in conjunction with guidance

  • you will need to return to that guidance to complete your action

If you are not using this ‘How to’ in conjunction with guidance

  • advise the customer(s) that their postcode area will close shortly to new tax credit claims unless exceptions to business rules apply

Note: Exceptions are where at least one of the customers is of Pension Credit Qualifying Age (PCQA) or where there are more than 2 children or qualifying young persons being claimed for.

  • direct the customer(s) to contact the tax credit helpline to have a new claim captured or claim pack issued if any exceptions apply
  • take no further action