Section 19 - Power to enquire
The Tax Credits Act 2002, Section 19
(See the Tax Credits Act at TCTM12000)
Enquiries are carried out after the end of the year within certain time limits (see TCTM10220). We want claimants to get the right amount of tax credits, and where we think there is a risk that they haven’t, we take Compliance action to check. This allows us to enquire into a person or couple’s entitlement as shown in the s17 declaration. We are not required to state the reasons for making the enquiry.
An enquiry requires a full review of the award. As part of the enquiry we can ask the claimant to provide any information or evidence which we consider is needed for the purposes of the enquiry, by the date specified in the notice. In order to make an Enquiry we must give notice in writing. If this is a joint claim it requires a separate notice to each claimant.
s19(2) As part of the enquiry the Board may by notice -
(a) require the person, or either or both of the persons, to provide any information or evidence which the Board consider they may need for the purposes of the enquiry, or (b) require any person of a prescribed description to provide any information or evidence of a prescribed description which the Board consider they may need for those purposes, by the date specified in the notice.
Some points Compliance staff need to note:
- The opening enquiry letter must be accompanied by a WTC/FS1 leaflet.
- If the notice is returned RLS the enquiry is not open.
- If an enquiry notice is issued and then we realise the window was not open, it is not a valid enquiry
- There is no time limit for HMRC to complete an enquiry. However, if a claimant thinks that HMRC are taking too long to complete the enquiry, they can ask a Tribunal to instruct HMRC to close it, unless the Tribunal accepts that HMRC have reasonable grounds for not making a decision on the enquiry at this time. A claimant can make the request as soon as they receive the opening letter.
There can only be one enquiry for each tax year, or one enquiry for each period of entitlement within the tax year s19(11).
If we are only concerned with a particular aspect of the award the most effective way of challenging this is through a discrepancy enquiry.
A small proportion of cases are selected for full enquiry on a random basis (random enquiries) as part of the Error and Fraud Analysis Programme (EFAP). You cannot open an EFAP enquiry until the enquiry window is open.
See also Penalties and Enquiries TCTM10600