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HMRC internal manual

Tax Credits Technical Manual

Decision Making: Valid Claims, Conclusive Entitlement and Changes to Decisions: Initial decision to award or disallow a valid claim

Following the acceptance of a valid tax credit claim, any decision taken to award or disallow is under section 14 of the Tax Credits Act (TCA). To summarise, this states that:

  • HMRC must decide whether to award and if so at what rate
  • Before making a decision under s14 HMRC have the power to require the claimant or another prescribed person (for example a child care provider) to provide information, see TCTM09450 
  • HMRC have the power to make an award at a nil rate

Backdating a new claim

Backdating means treating a claim as having been made on an earlier date.

S4(1) of the TCA provides the power to enable a new claim to be treated as made on an earlier date if entitlement existed at that time (subject to certain restrictions).

Claims and Notifications 7(1-3) prescribes that a claim can be treated as made earlier up to and including a maximum period of 31 days prior to the receipt of a claim. The claim should only be treated as made from a date when the claimant was entitled to tax credits. This 31 day time limit is absolute with the exception of two types of case;-

  • asylum seekers that are granted refugee status (see TCTM02112), and
  • backdated entitlement of tax credits due to a backdated decision on a qualifying disability benefit beyond 31 days (see TCTM06104)

Where a tax credits claim is received during the period April to July and the standard 31 days backdating is applied, the date of claim may be treated as being made in the previous tax year.

Note: further information on backdating can be found at TCTM06104 

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Changing a claim before a s14 decision is made

If a claim is accepted as valid but before the s14 decision is taken, the claim can be amended by the claimant(s).

Claims and Notification 5(7) states that:

5 (7) At any time after a claim has been made but before the Board have given notice of their decision under section 14(1) of the Act in relation to the claim, the person or persons by whom the claim was made may amend the claim by giving notice orally on in writing to a relevant authority at an appropriate office.

Note: further information on changing a claim can be found at TCTM06107