Tax credit rejects

19 October 2006

Issue: 4080 / Categories: Forum & Feedback , HMRC powers

Because tax credit claims can only be backdated three months, we make protective claims for self-employed clients with fluctuating income. This year, we have been updating the Tax Credit Office (TCO) with 2005-06 details to enable provisional awards to be finalised. This usually works, but in two cases, where no award was paid for 2004-05, 2005-06 or 2006-07, a fall in 2005-06 income means that there is eligibility to working tax credit.

The TCO states that as no payments were made these clients have been 'taken off the system' implying that we must reapply. Any award could only be backdated three months and none would be paid for 2005-06 despite the client's eligibility and the fact that so far as we were concerned a claim had been made and was in place for the year.
Can this injustice be addressed?
Query T16 896 — TC.

Reply by P.M.:

Claimants with protective claims should receive an annual review form (TC603R) after the end of each tax year to be used if there has been a notifiable change in circumstances otherwise the claim would be automatically renewed for the following year. If circumstances have changed — for example if income has changed outwith the limits shown on the form then the Tax Credit Office would...

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