CCM10135 - Penalties and Interest: Overview of Failure to Notify a Change of Circumstances - from 6 April 2007
The following guidance applies from 6 April 2007. For changes
occurring before 6 April 2007 – see
CCM10130.
Tax Credits are awarded on a provisional basis for the whole
of the next tax year or the remainder of the tax year if the claim
is made during the year. After the end of the tax year claimants
are asked to confirm their income and circumstances.
The provisional nature of the award means that if
someone’s circumstances or income changes significantly
during the tax year they might either have received too much or too
little tax credits. We want people to receive the right amount of
tax credits at the right time so we will encourage claimants to
tell us when their circumstances or income change. However, a
balance needs to be struck because, for example, some
people’s income changes on a weekly basis and we do not want
them having to call us each week.
To avoid people running up large debts (because they have
received more credits than they should do) for certain changes
there is a mandatory requirement to notify the change of
circumstances within a specified period. These circumstances
are:
- A single claimant could no longer make a single claim
- Joint claimants could no longer make a joint claim
- The relevant child care charges become less than the previously calculated average weekly charge by £10 a week or more for 4 weeks
- The relevant child care charges become nil
- when someone’s entitlement ceases because they:
- permanently emigrate from the UK
- lose their right to reside in the UK
- are no longer classed as being in the UK
- when someone’s entitlement ceases because their temporary absence lasts more than 8 weeks, or 12 weeks in exceptional circumstances. The exceptional circumstances are when the absence is in connection with
- the treatment of illness or physical or mental disability of
the person
their partner
a child or qualifying young person they or their partner are responsible for
the person’s or their partners relative
- the death of
their partner
a child or qualifying young person they or their partner are responsible for
the person’s or their partners relative
- when someone’s usual working hours change so that they work less than 16 or 30 hours a week. For couples with children it is their joint working hours that count towards the 30 hours.
- They have been on strike for more than 10 days
- when one of their children leaves the family and moves to live with someone else. This includes a child who has been:
- taken into care or fostered to another family
- found guilty by a court and sentenced to custody or detention for a period of 4 months or more
- when a child or young person they are responsible for stops qualifying for support, for example the child or young person:
- leaves non-advanced full-time education or approved training before they reach 20
- starts to have their training provided under a contract of employment
- stops being registered with a careers service , or the Connexions Service or equivalent
- starts to claim Income Support, Incapacity Benefit, Employment and Support Allowance, income-based Jobseeker’s Allowance, Child Tax Credit or Working Tax Credit in their own right
- dies.
Claimants must tell us about such changes within 1 month of the date:
- on which the change of circumstances occurs
- the claimant realises the change has happened if this is later
Any overpaid tax credits will still be calculated from the date
the change happened.
For example if a claimant’s usual working hours
dropped to less than 30 hours on the 12 November 2007, but because
the number of hours they work each week varies so much that they
did not realise until 2 December 2007 that there had been a
change:
- they will have 1 months from 2 December to report the change
- their award will be adjusted to reflect
their new usual hours from 12 November and they will have to repay
any overpaid tax credits.
