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HMRC internal manual

Tax Credits Technical Manual

From
HM Revenue & Customs
Updated
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Payments of Tax Credits: Payments to a bank, building society or other account

Requirements for claimants to have an account

Tax Credits Act 2002, section 24

Tax Credits (Payment by the Commissioners) Regulations 2002, Reg 13 & 14

Entitlement to tax credits is dependent on the claimant notifying HMRC of an account into which the tax credits can be paid.

Any account that is capable of accepting a BACS payment is suitable to receive tax credits payments. BACS stands for Banks’ Automated Clearing System and is the system used by the Commissioners for HM Revenue and Customs to make payment of tax credits.

The account does not have to be in the claimant’s name and, provided it will accept BACS payments, any account, for example a business account, a child’s account or a relative’s account, is acceptable.

In practice, though, the account will normally be in the claimant’s name or perhaps in joint names where there is a joint claim and will be either a bank, building society or Post Office® card account.

Frequency of payment to an account

Tax Credits Act 2002, section 24

Tax Credits (Payment by the Commissioners) Regulations 2002, Reg 8

Tax credits payments to an account can be made on either a weekly or a four-weekly cycle.

Claimants are invited on the claim form to select their preferred payment cycle. If they do not, they will be paid on the four-weekly cycle.

Where, in a joint claim, one partner is receiving the WTC and the other is receiving the CTC, including any childcare element of WTC, the two payments may be made at different frequencies. So the partner receiving the WTC may choose to be paid every four weeks while the partner receiving the CTC, including any childcare element of WTC, may choose to be paid every week. However, the partner receiving CTC and the childcare element of WTC cannot chose to have those two elements paid at different frequencies. They must be paid together; either on a weekly cycle or on a four-weekly cycle

A claimant can request a change to their pay frequency at any point during the period of the award. However, notwithstanding the terms of the election the Commissioners of HMRC may pay the tax credits or element either each week or every four weeks as appears to them to be appropriate.

Generally tax credits payments are made in arrears.