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HMRC internal manual

Tax Credits Technical Manual

From
HM Revenue & Customs
Updated
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Decision Making, Joint or Single claims, Couples where only one partner is in the UK: Cross border workers and how EU Law affects joint claims

The following examples show how a couple who live in one European Economic Area (EEA) Member State or Switzerland and work in the UK should claim tax credits, either singly or jointly, dependant on differing circumstances.

Cross border worker - Only one partner working in UK

A couple, both EEA nationals, live together in the Republic of Ireland with their children. One partner does not work, the other works in Northern Ireland returning to their home in the Republic of Ireland every night. The worker is a national of one member state, the Republic of Ireland, but works in another member state, the United Kingdom (UK). In this example WTC and CTC will be treated differently.

WTC - Under Article 7 of Council Regulation 1612/68 they are entitled to claim WTC as they are entitled to the same social advantages as UK national workers. They are treated as being present and ordinarily resident in the UK because they are exercising in the UK their free movement rights as a worker under Council Regulation (EEC) 1612/68, but the partner who doesn’t work in the UK is not exercising that right and so is not treated as present and ordinarily resident in the UK meaning the UK worker must a single claim to WTC.

CTC - Under EU law, the worker is entitled to UK family benefits (CTC and ChB) for their family members living in the Republic of Ireland as if they were living in the UK. That means we must treat their family members, partner and children, as if they lived in the UK, so they must make a joint CTC claim.

Cross border worker - Both partners work in the UK

In the same example as above, if both partners work in Northern Ireland they can make a joint claim for both WTC and CTC.

Cross border worker - One partner works in the UK, other starts work in the EEA

Using the same example as above, if the non-working partner starts work in the Republic of Ireland that country becomes responsible for paying any family benefits - due to this employment and location of the children. The UK’s competency for paying CTC ends and Ireland becomes the ‘competent state’ to pay their equivalent of CTC and CHB. If Ireland’s rates are lower than the UK’s rates we may ‘top up’ the amount to what the couple got from the UK to ensure they do not lose out. The amount of CTC the couple would get from the UK must be calculated on a joint claim basis. The single WTC claim will not be affected.