TCTM11001 - Transition to Universal Credit: Abolition of tax credits

The Welfare Reform Act 2012, Section 33(1)(f)

The Welfare Reform Act 2012 (Commencement Order No. 32 and Savings and Transitional Provisions) Order 2019

The Welfare Reform (Northern Ireland) Order 2015 (Commencement No. 14 and Savings and Transitional Provisions) Order 2019

Child Tax Credit and Working Tax Credit are abolished under section 33(1)(f) of the Welfare Reform Act 2012.

The Welfare Reform Act 2012 (Commencement Order No 32 and Savings and Transitional Provisions) Order 2019 came into force on 1st February 2019 which effectively “closed” the gateway to new tax credits claims.

Note: Persons can still make a claim for tax credits if they are a frontier worker but this will require a “warm handover” from DWP.

The commencement order also introduced “savings” to enable HMRC to continue to administer tax credits awards where entitlement existed on 31st January 2019. In these cases, s33(1)(f) of the Welfare Reform Act 2012 is treated as if it had not come into force. There is also provision allowing HMRC to revise decisions under section 19, 20, 21A and 21C of the Tax Credits Act 2002 or regulations made under section 21 on ongoing awards and also where entitlement to tax credits ended on or before 30th January 2019.