Frequently asked questions (FAQs) about tax credits

Published on 24 August 2004

An increasing part of our role is dealing with specialist queries from people on low incomes who come into contact with the tax system in various ways, and from their advisers. We are receiving a growing number of queries, both directly and via our website, on tax credits, and over the past few months we have been trying to isolate those to which the answers are not immediately apparent from Inland Revenue literature or from other official sources

We have analysed these questions, and others that we have found (both from our own experience and from discussion with colleagues) need clarification, into a list of FAQs. The FAQs are listed below and we shall of course post answers as they become available.

ADVICE AND HELP BY INLAND REVENUE

  1. Please confirm that the Revenue, or the DWP, will at all times offer to their customers the opportunity for a face-to-face interview when requested, in accordance with Baroness Hollis’s undertaking in Grand Committee on the Tax Credits Bill (Official Report, 21 May 2002, CWH 80).
  2. Customers who are 'servants of the Crown' are entitled to continue to receive tax credits despite having absences abroad that would disqualify other recipients. What actions are being taken by the Revenue to ensure that customers within the definition above are being informed that these rules apply to them?
  3. I am considering taking a part-time (16 hours a week) job which offers only low pay, and I’m not sure whether I shall be better off taking it or staying on income support. Where can I go for advice?

    APPEALS

  4. Please confirm that all appeals are immediately logged upon receipt and promptly acknowledged.
  5. Please describe the system in place for managing the progress of tax credit appeals and how it is geared to minimise delays in the process.

    ENQUIRIES

  6. If the Revenue enquire into my tax credits claim will they tell me why they have started the enquiry?
  7. My partner runs a business and the Revenue have started an enquiry into his self-assessment return. I am worried that whatever is decided will affect the money I get for our children. I need to know what is happening so that I can budget if we have to manage on less, but my partner is reticent about it. Who in the Revenue can I talk to?
  8. Will the Revenue confirm that information already submitted as part of an SA Return (for example, white space entries) or enquiry will not be requested again as part of a tax credit examination or enquiry?
  9. Please confirm that the Revenue will always arrange for an interpreter at meetings with customers who experience difficulty in speaking and understanding English, and not just when required to do so by Human Rights Act 1996, Sch 1, art 6, para 3(a), (e).

    HELPLINE

  10. How do I obtain a record of a telephone conversation I have had with the Helpline?
  11. Please confirm that if I complete my tax credits claim or renewal papers incorrectly on the basis of advice given me by the Helpline, I will not be charged a penalty nor subjected to a full examination or enquiry.

    OVERPAYMENTS

  12. I have been told that I have been paid too much tax credit, but I disagree with the decision which gave rise to the alleged overpayment. Can I apply to postpone recovery of the overpayment pending the result of the appeal?
  13. I have been told that I have been paid too much tax credit, but the overpayment has only arisen because the Revenue have ignored all my attempts to notify them of a change in my circumstances, and now I am experiencing hardship. Please confirm that the Revenue may use its statutory discretion to remit part or all of the overpayment.
  14. I have been paid too much tax credit, and you have acknowledged that this is a result of Revenue error. However, you still propose to recover the overpayment from me in full, because you say I should have known that the relevant award notices were wrong. But I find my award notices impossible to understand and so do my advisers. Please confirm that you will not recover the overpayment as I could not reasonably be expected to understand the notices I have been sent.
  15. Please confirm that overpayments will be remitted in full where they arise from an error or omission by the claimant which is itself attributable to a mistake in the notes to the claim form TC600.
  16. Please confirm that every customer who is told they have been paid too much tax credit is informed why the overpayment has arisen.

    PASSPORTED BENEFITS

  17. Please confirm what steps the Revenue take to inform tax credit recipients on a low income individually of the passported benefits to which an award of tax credits entitles them.

    PENALTIES AND GENERAL COMPLIANCE

  18. Please confirm that the Revenue will not seek two penalties for the same mistake where it is repeated in a self-assessment form and a tax credit claim.
  19. The Revenue have indicated that a transposition of figures by a customer in a tax credit claim 'at least amounts to carelessness and we could argue that this amounts to neglect so that a penalty is appropriate'. Please confirm that any such judgment on the part of a Revenue officer will take fully into account all the surrounding circumstances, especially the claimant’s levels of numeracy and ability to cope with complex Government forms.
  20. The IR failed in its original notes to customers to identify that customers should notify an absence overseas that might disqualify them from receipt of tax credits. Would the Revenue please confirm that customers will not be charged a penalty for any such failure in 2003/04?
  21. Would the Revenue please confirm that the training of compliance officers for tax credits includes training on the interaction between tax credits and self-assessment, child benefit, council tax benefit and housing benefit?
  22. What are the levels of reduction applied to penalties where the customer co-operates with the Revenue in an investigation? And what criteria do the Revenue use when deciding whether, and by how much, to reduce them?
  23. Will the Revenue explain to the non-culpable customer the level of penalty that is being sought from a culpable partner of that customer, and what account will be taken of the financial circumstances of the non-culpable partner in the penalty negotiations?
  24. Will the Revenue confirm that in no circumstances will they institute proceedings for the recovery of a tax credit penalty against the non-culpable partner of a couple making a claim?
  25. Will the Revenue confirm that evidence provided in telephone conversations with a customer (and recorded by the Revenue) will not be used in subsequent prosecution of a tax credit offence?
  26. Following a 'reasonable excuse' for delay by the customer in providing information, please confirm that the Revenue will allow a reasonable period (and at least 30 days) to provide the outstanding information (i.e. after the reasonable excuse has ended)?
  27. Will the Revenue confirm that customers going overseas for extended periods will be regarded as giving sufficient notice of their departure overseas for tax credit purposes when they complete form P85 and submit it to their tax office or the Centre for Non-Residents?

(24-08-2004)

Contact Name: Robin Williamson (Contact tel: 0844 579 6700, Fax: 0844 579 6701)