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HMRC internal manual

Tax Credits Technical Manual

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HM Revenue & Customs
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Claims and Notification: End of Year - Final Notice

The Tax Credits Act s17

At the end of each tax year, HMRC gives notices to all tax credits claimants, who have been awarded for the whole or part of the tax year, and in the case of joint claims, to each claimant.

The notices replay the circumstances of each tax credits claim awarded to the claimant(s) for the previous tax year. If the circumstances are incorrect or have changed, including changes in income which will affect the amount of tax credits payable, the claimant(s) must respond to the notice so that the amount awarded can be checked and their entitlement for the year finalised.

Where the claimant is told they do not need to respond to the notice, HMRC will accept that the circumstances were as quoted on the notice and the income between a specified income range, unless notified of a change.

In all other cases, although there may be no changes to report, the claimant(s) will be asked to respond and confirm the details are correct, as appropriate.

The manner in which a declaration or statement in response to a notice under section 17 of the Act is to be made

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 34

A declaration or statement in response to a section 17 notice must be made

  • in writing on a form approved by HMRC for that purpose;
  • orally to an officer of HMRC; or
  • in other such manner as HMRC may accept as sufficient in the circumstances of any particular case.

In the case of an oral response one of two joint claimants may act for both of them, if at the time of the response a joint claim could be made by both of them.

Renewal Claim

The circumstances in which a declaration can be treated as a claim for the tax year following that to which the notice relates.

The Tax Credits (Claims and Notifications) Regulations 2002, Regs 11 and 12

Where a person (when there has been a previous single claim) or both persons (when there has been a previous joint claim) responds to the end of year notice:-

  • providing that the declaration contains all the requested information (or such of that information as may be sufficient in the circumstances - TCTM06102), the declaration is treated as a claim made for the tax year following that to which the s17 notice refers.

Please note that for a joint claim we will accept one declaration from one member of the couple by telephone on behalf of both parties. However both must reply if the declaration is in writing.

Scenarios

In the first three scenarios set out below, the date of claim will be the 6 April of the year following that to which the notice relates. In any other case, the date of claim will be the date on which the declaration is received (TCTM06100), subject to the normal rules for backdating (TCTM06104).

In scenarios 2 and 3, “provisional payments” means payments of tax credits provided for by section 24(4) of the Tax Credits Act. Notification that provisional payments have ceased due to the claimant’s failure to return the end of year notice by the date specified on the notice typically takes the form of a Statement of Account.

Scenario 1

Where the declaration is made by the date specified on the s17 notice the claim shall be treated as made on 6 April following the period to which the s17 notice relates.

Scenario 2

Where the declaration is made within 30 days following the date that notification was given that provisional payments had ceased due to the claimant’s failure to make the declaration, the claim shall be treated as being made on 6 April preceding the period to which the s17 notice relates.

Scenario 3

Where the declaration is made after the date specified on the s17 notice and

  • is outside 30 days of the date that notification was given that provisional payments had ceased due to the claimant’s failure to make the declaration;
  • and is made before 31 January in the tax year following the period to which the notice relates; and
  • and in the opinion of HMRC, the claimant had good cause for not making the declaration by the date specified on the s17 notice or within the 30 day period referred to above
  • the claim shall be treated as being made on 6 April following the period to which the s17 notice relates

Scenario 4

In any other case, the claim shall be treated as being made on the latest date on which the declaration is received by a relevant authority at an appropriate office, subject to the normal backdating rules.

Exceptions

The above does not apply:

  • where there has been a previous single claim if the customer could no longer make a single claim, or
  • where there has been a previous joint claim if the customers could no longer make a joint claim, or
  • where the response to the notice specifies that such response is not to be treated as a new claim for the tax year beginning 6 April following the period to which the s17 notice relates

Where a person or persons are not required to respond to an end of year notice and they choose not to respond:

  • they will be treated as if they have made a claim for the tax year following that to which the notice refers.
  • the claim will have an effective date of 6 April.

Exceptions

The above does not apply:

  • where, before the specified date, the person or persons advise the Board that they do not wish to be treated as making a new claim for the tax year beginning 6 April following the period to which the s17 notice relates
  • where there has been a previous single claim to which a notice under s17 of the Act relates and a relevant notification is given to the claimant and the claimant fails to make a relevant request, or
  • where there has been a previous joint claim to which a notice under s17 of the Act relates and a relevant notification is given to the claimants and the claimants fail to make a relevant request.

A relevant notification means:

  • a written notification to a person or persons by whom a claim for tax credits was made which:

    • is given by HMRC at least 35 days before an s17 notice is issued
    • states the date on which it is given
    • advises that HMRC intends to give such a notice to the person or persons, and
    • advises that a reply to an s17 notice will not be treated as a claim made for the tax year following that to which the notice relates unless a relevant request is made

A relevant request means:

  • a request made to HMRC by a person or persons to whom a relevant notification is given that:

    • is made in response to the relevant notification within 30 days of the date on which it is given; and
    • requests that the person or persons will be treated as making a claim for tax credits for the tax year following that to which the notice relates  

Circumstances in which claims made by one member of a couple are to be treated as also made by the other member of the couple

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 13

A claim for tax credits made by one member of a couple is to be treated as also made by the other member of the couple in such manner and in such circumstances as the Board may decide. Where one member of a couple responds to a notice under section 17 of the Act given to both members of the couple they are both treated as having made a claim for tax credit.

Giving notice

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 32 and 33

A person has not less than 30 days after the date of notice to:

Initial decisions: Tax Credits Act 2002 Section 14(2)

  • provide information or evidence that is required, from the claimant and from third parties in order to reach a decision.

Revised decisions: Tax Credits Act 2002 Section 15(2)

  • provide information or evidence that is required, to amend a tax credit award because of a change of circumstances which may increase the rate of tax credit.

Other revised decisions: Tax Credits Act 2002 Section 16(3)

  • provide information or evidence that is required, to amend or terminate the award of tax credits which was awarded at a rate which differs from the rate that they are entitled to or to which they have ceased to be entitled to.

Dates to be specified in notices under section 17 of the Act

Tax Credits Act 2002 Section 17(2)(4)(8)

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 33

A notice under section 17 of the Act, must require the person or persons, by no later than 31 July following the end of the tax year to which the notice relates, or 30 days after the date on which the notice is given, to :-

  • declare the relevant circumstances were as specified or state any respects in which they were not; or
  • inform them that they will be treated as having made a declaration that the relevant circumstances were as specified unless, by that date, they state any respects in which they were not.
  • declare the amount of current year income or estimated current year income was the amount, or fell within the range specified; or
  • inform them that they will be treated as having made a declaration that the amount of the amount of the current year income or estimated current year income was the amount, or fell within the range specified,
  • unless they declare that the amount of the current year income or estimate of current year income; or
  • declare that throughout the period to which the award related, they were entitled to any of the prescribed social security benefits which remove the income test.

The notice must inform the person or persons that if they make a declaration in relation to estimated current year income (or the range within which the estimated current year income fell) or states their estimate of the current year income, they will be treated as having made a declaration in response to the notice that the amount of the actual current year income was as estimated, unless by 31 January following the end of the tax year to which the notice relates, or, if later, 30 days after the date on which the notice is given, they state the current year income.

Dates to be specified on a notice for additional information or further evidence before making a decision on entitlement under section 18 of the Act or a decision on a claim under section 14 of the Act

Tax Credits Act 2002 Sections 14(2) and 18(10)

Tax Credits (Claims and Notifications) Regulations 2002

  • If HMRC ask the claimant for additional information/evidence before making their decision under section 18, the claimant has 30 days to provide that information.

Power to enquire: Tax Credits Act 2002, Section 19(2)

  • provide information or evidence that is required, about entitlement to tax credits for a tax year or, the amount of tax credit they are entitled to for the tax year.