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HMRC internal manual

Tax Credits Technical Manual

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HM Revenue & Customs
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Changes of circumstances: Notifying a change to the information TCO hold

The Tax Credits Act 2002, section 6, 14, 15 & 21

Tax Credits (Claims and Notifications) Regulations 2002, Regulations 25, 26 & 26A

Currently where

  • A claim for tax credits is received and awarded, and
  • The claimant later provides information (whether or not during the finalisation process but prior to the section 18 finalisation decision being made), and
  • That information increases the maximum rate to which they are entitled; and
  • There has been no official error relating to that information

HMRC takes action under section 16 of the Tax Credits Act 2002, to correct the award. However, in these cases the new information is actually a report of a change in circumstances. 

Accordingly, in any case where

  • A claim for tax credits is received and awarded under section 14 of the Tax Credits Act 2002, and
  • the claimant later provides information (whether or not during the finalisation process but prior to the section 18 (Tax Credits Act 2002) finalisation decision being made), and
  • that information increases the maximum rate to which they are entitled; and
  • there has been no official error relating to that information

The notification of the new information should be dealt with under section 15 of the Tax Credits Act 2002. As a result, the usual backdating criteria will apply to the date from which that change is notified.

Example 1

Single claimant with three children completes a claim for tax credits in April 2012.

The claimant, in error, only includes two of their children on the claim form.

Tax credits are awarded for 2012/2013 based on two children.

In August 12 the claimant realises their mistake and contacts HMRC to inform them of the mistake.

The notification of the error is treated as a change to the circumstances HMRC hold and the claim is amended under section 15 of the Tax Credits Act 2002.

The missing child is included in the claim from one month earlier, i.e. July 12.

Example 2

Single claimant with three children completes a claim for tax credits in April 2012.

The operator, in error, only inputs two of the children onto the computer system.

Tax credits are awarded for 2012/2013 based on two children.

In August 12 the claimant realises the mistake and contacts HMRC to inform them of the mistake.

The notification of the error is treated as an official error and the claim is amended under section 21 of the Tax Credits Act 2002.

The missing child is included in the claim form from the date of claim, that is to say April 12.