My client decoupled on 3.12.07, and phoned the tax credit office 6.12.07 to tell them. They agree that she told them on this date. However they made a payment of WTC and CTC on 11.12.07 (i.e. 5 days later), and are asking for it back.

The COP26 (page 2) talks about HMRC's responsibilities, saying

"When you contact us to tell us about a change of circumstance we should accurately record what you've told us and send you a new award notice within 30 days."

It doesn't say anything about how quickly they should stop making payments. It's only a relatively small amount (around £340) but it's a lot to the client.

On p. 4 of the COP26 it gives "example 1" where it seems to say that if they don't send the new award notice within 30 days, they can "only" recover 30 days of overpayments. This seems to imply that they can claim back up to 30 days of overpayments if they DO send the notice out within 30 days? This seems grossly unfair to very vulnerable clients.

I've put in a TC846 to dispute it, but wonder if anyone has any comments or advice for me.

Thanks
Chris.

Has the amount overpaid been offset against the amount she should have got as a single person?

No, she's in effect been paid twice for the same period, as the new single claim started from the date of separation - although she didn't know she'd been paid twice because the first few weeks of the new claim were backdated when the claim actually got into payment.

But I thought the offsetting couldn't happen when the alleged overpayment is on a double claim and the new claim is a single claim? I thought the rules changed about this following CSTC/724/2006 which was about there being no legal provision for offsetting of underlying entitlement against an overpayment resulting from a member of a couple claiming as a single person, or vice versa.

I'm on holiday for two weeks from today, but will check replies when I get back. Many thanks.

Chris.

We have had success with the offsetting when the single claim has not yet been put in to payment and the joint claim continues.

This is not the case for this case though.

For this one i'd follow COP 26 and complain that TCO have not acted responsibly and i would take it to the adjudicator if need be - it's obvious the client told them they'd separated as the single claim was paid.

It's worth a try anyway - hope you enjoyed your holiday!

Nicky

I would fight it all the way to Ombudsman if necessary.

It is interesting that the case you mention (reported as R(TC)1/07) includes an offer by TCO to offset if given evidence of the partner's earnings. The claimant apparently did not take this up but para. 18 says the Commissioner has been told by TCO that the offer is still open.

So why did they change the rules (which I believe they did in May 2007, shortly after this judgement)?

My view is that it is ethically unacceptable for them to refuse offsetting when there has been no loss to public funds (or, as in this case, where the loss can be quantified). Fair enough to impose some kind of penalty if the "overpayment" has resulted from unreasonable delay or some other fault by the claimant, but some of these cases run into many £000s which is an outrageous penalty to inflict. I can see nothing in the Commissioner's decision to justify refusal of offsetting - indeed if he had intended that it should be refused he would surely not have written para. 18 as he did.