Afternoon All

I have recently become aware of some problems relating to those claims that are terminated for non-renewal (either because the claimant didn't send the renewal form back or because they did and HMRC say they didn't receive it, or HMRC received it but terminated anyway).

My understanding is that these cases should be restored if the claimant contacts HMRC within 30 days of the statement of account or if over the 30 days it should be restored if good cause present.

I have seen some cases where advisers have been told that restore is not possible within the 30 days, and cases where the helpline have advised claimants to make new claims. This has meant an overpayment remains on the old claim which has to be disputed and any ongoing o/p recovery switches to direct recovery.

I have raised this issue with the TCCG (consultation group) and I would like to find out if there are other examples of this happening.

If anyone has come across any similar cases please feel free to email me at victoriatodd28@yahoo.co.uk

Thanks

Victoria
(LITRG)

Hi Victoria,

I have never been entirely clear about the basis for termination of an award due alone to non-renewal/late renewal. If a claimant fails to renew at all or fails to renew on time (without good reason) etc, then the Revenue has to make decision what to do. This may be a decision to terminate, if the Revenue does not at that point consider the claimant is entitled, on the facts or information they have. They can also decide to treat the hitherto estimated data as confirmed data (I think s17 allows for this whimsy). They can also of course decide to launch a compliance investigation to find the missing facts. However, my understanding is that termination is not the automatic outcome of non compliance with the renewal stage. What do you think?

The Revenue believing it has powers it hasn't led to a considerable amount of embarrassment with all those wrongly re-visited s18 decisions, and it would not surprise me if they believe that can simply terminate when they please.

Didn't the Ombudsman have something 'claimant friendly' to say about documents/declarations being lost in the post, in her 'Tax Credits: getting it wrong' report?

Cheers

Steve

http://www.hmrc.gov.uk/manuals/ntcmanual/ren_misc/good_cause_info.htm

heartily sick of their tedious manuels, but clicking on the 'good cause' link in the 'Notices' section of the Tax Credit Manual found this...(why can't they use paragraph numbers like everybody else, huh?)
30 days + 30 for admin...

Hi Jan,

The useful link you provided contains a sub link to the definition of 'termination'. If you go to that, it refers to termination at the renewal stage in terms of the termination of any provisional award since April, and then a finalised decision about the previous year's entitlement, based on the info they already have etc (which could end up saying the claimant was/was not entitled etc).

So when they refer to 'termination' under these definitions, they are not saying the entitlement itself is automatically killed off/dead/deceased, simply because of the lack of a timely renewal form. 'Termination' under these definitions does not necessarily mean 'lights out', for the entire entitlement. Do agree with this analysis?

Indeed, the 'Good Cause' page you refer to seems to suggest ways to bring back to life a terminated claim, either at the claim stage, or later.

Tax credit claims...the Michael Myers of the benefits system!

Steve

Hi Steve

My understanding is that if the renewals form is not returned by the specified date, run on payments will end and those paid to date turn into an 'overpayment' which HMRC then try to recover.

They finalise the previous year based on the last information they have (the power given under Section 17). However, as no renewals form has been submitted there is no new claim.

Re your question about whether this always happens - I believe so. I don't think they make a choice, my understanding is that cases will always become 'terminated for non-renewal' where the s.17 form has not been returned by the relevant date.

Termination in this respect seems to me to mean termination of the run on payments (under Section 24 TCA) - no entitlement has been established as there is no new claim.

Victoria

Hi Victoria,

Thanks for this, and what you suggest makes sense. I am not even sure why all this is bothering me, but I remember being told otherwise at the beginning of the scheme (who? when? - no idea!).

But in response...if the Revenue allow themselves under s17 to use the hitherto estimated data as actual data for the purposes of the previous year, then what prevents them from using the same data as the basis for the re-newed claim?

Should I be changing my tablets?

Steve