HMRC internal manual

Tax Credits Manual

TCM1000655 - How to check for exceptions to business rules

Background

Note: From 27th January 2021, there are no new claims to tax credits

To support the expansion of Universal Credit (UC), The Department for Work and Pensions (DWP) and The Department for Communities (DfC) in Northern Ireland, are undertaking a phased rollout of Universal Credit (UC). By 31 December 2018, this rollout will be complete and new claims for Tax Credits (TC) will not be accepted after this date. HMRC will signpost customer(s) to DWP or DfC to claim Universal Credit instead.

The only exceptions to this are where the customer (or in the case of a joint claim, one of the customers) is Pension Credit Qualifying Age (PCQA) or they have more than 2 children. Business rules will allow these exceptions to be identified and Tax Credit claims can be accepted on this basis. Full Gateway Closure will take place on 31 January 2019 and, after this date, new TC claims from these exception groups will no longer be accepted.

Note: From 16 January 2019, an additional exception will be accepted where the customer is entitled to the Severe Disability Premium (SDP) as part of their legacy benefit.

From 1 February 2019, Tax Credits will be closed to customers making new claims. The only exception to this is customers who:

  • are or have been within the past month, entitled to an award of an existing benefit that includes a severe disability premium (SDP); and
  • if their award ended during the past month, they have continued to satisfy the conditions for eligibility for a severe disability premium.

SDP is an extra amount of money that is added to Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance and Housing Benefit. 

To be entitled to the SDP, a person must get the disability premium or income related Employment Support Allowance and one of the following qualifying benefits:

  • Personal Independence Payment (PIP) daily living component
  • Armed Forces Independence Payment (AFIP)
  • Disability Living Allowance (DLA) care component at the middle or highest rate
  • Attendance Allowance (or Constant Attendance Allowance paid with Industrial Injuries Disablement Benefit or War Pension).

They usually cannot have anyone aged 18 or over living with them, unless they are in one of the following situations:

  • they get a qualifying benefit
  • they are registered blind
  • they are a boarder or subtenant (but not a close relative)
  • they make separate payments to the landlord

They cannot get the SDP if someone is in receipt of Carer’s Allowance or the carer element of Universal Credit for looking after them.

If they are part of a couple, they may get the SDP at the single rate if both they and their partner get one of the qualifying benefits and someone gets Carer’s Allowance or the carer’s element of Universal Credit for looking after just one of them.

Note: If the customer is unsure whether they have been awarded the SDP in their benefit or are eligible to it, tell them to contact DWP (DfC in they live in Northern Ireland) or their Local Authority if they are receiving Housing Benefit, for confirmation.

Step 1

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 they are claiming for more than 2 children/qualifying young persons.

Check if the household contains a customer who is of PCQA. You can do this via the gov.uk calculator. This can be found at 

If the household contains a customer who is of PCQA

  • the customer is entitled to claim tax credits
  • go to Step 2.

If the household does not contain a customer who is of PCQA

Step 2

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 3

You will need to check how many children/qualifying young persons the customer is claiming for.

If the customer is claiming for more than 2 children/qualifying young persons

  • the customer is entitled to claim tax credits
  • go back to Step 2.

If the customer is not claiming for more than 2 children/qualifying young persons

  • the customer is not entitled to claim tax credits
  • go to Step 4.

Step 4

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 (UC) is a new benefit that is replacing a range of existing benefits including tax credit
  • direct the customer to gov.uk to make a claim for Universal Credit (UC)
  • take no further action.