Working with the following client(s) - British National in full time employment and husband with on-going asylum claim (no recourse to public funds.) Husband has now been granted permission to work as he has been awaiting a decision on asylum application for over a year. How will this effect their tax credit's claim?

They initally applied jointly and husband was allocated a N.I number. However, after a long wait this claim was never processed and Tax Credits advised couple to apply as a single person (wife only.) Child is in nursery full time as husband attend's college.

If the husband starts working full time; I suspect that the single claim will cancel and they will have to apply jointly - but this is what they did initally and it was not processed? The family structure has stayed the same; tax credits are aware the couple are together, yet still advised a single claim? What to do?

On the face of it, it seems that the TCO advice was wrong. The Tax Credit Immigration Regs. are quite clear that people who are subject to the "no recourse" rule can be included in joint claims with British subjects (or others not subject to the rule). From what you say, it appears the couple may have been losing out by not getting the couple element of WTC, but could they also have been gaining because the fact that it is a single claim means the wife is getting a childcare element? If she is you need to check the regs. for paying childcare when one of a couple is not working. (In most cases it is not payable, because it is assumed the non-working parent can care for the child - I don't know whether there are exceptions for situations such as your client where the husband attends college.) If they have been losing out overall I think you should go through the complaints procedure and, if necessary, to the Adjudicator - &/or involve the local MP.
I think it is a moot point whether a new joint claim should need to be submitted (because it seems to me that the previous joint one should have been processed), but it is probably the quickest way of getting a correct payment - but, if the wife is getting childcare, this could end up lower than their present payment and with the possibility of the nightmare of a backdating and overpayment demand.