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HMRC internal manual

Tax Credits Technical Manual

Payments of Tax Credits: Introduction

The general rule is that tax credits must be paid to an account notified to the Commissioners for HM Revenue & Customs by the person who is to be paid the tax credit.

In exceptional circumstances, for example where a claimant is for some reason temporarily unable to open an account, the Commissioners for HM Revenue & Customs may decide to make payment by cashcheque (formerly known as giro).

When tax credits were introduced in April 2003, payment of WTC to employed claimants was made by their employers with their wages. This was known as payment via employer or PVE and had been introduced with Working Families’ Tax Credit to help reinforce the link between tax credits and work.

In the 2005 Budget, the Chancellor announced that PVE would be gradually phased out, to be replaced by direct payments from the Commissioners for HM Revenue & Customs. No PVE payment schedules were set up for new WTC claims or new WTC entitlement from 7 November 2005 and, by 31 March 2006, there were no longer any claimants receiving WTC through their employer with their pay. From 31 March 2006, all WTC recipients have received their payments direct from the Commissioners for HM Revenue & Customs.