CCM10435 - Penalties and Interest: Interest on Overpaid Credits - Continuing Awards

Where there is a continuing award any overpayment will be collected from future payments. You will not need to take any further action regarding the recovery of the overpayment. Any penalty chargeable will be dealt with separately using a letter of offer. If there is an interest charge it will be notified to the SAFE Unit, Tax Credits Team, Shipley using the stencil at CCM8127 and CCM14155.

Where an overpayment is to be recovered from a future award, the interest will be charged from 30 days after the first specified date (see CCM11045) to the date 30 days after the revised decision notice. On receipt of the interest stencil the interest will be calculated by the SAFE Unit, Tax Credits Team, Shipley. If the claimant asks you how much the interest will be or what period it will be charged for you should provide the necessary details.

Example 1.

A 2004/2005 enquiry is settled by issuing a revised decision notice on 1 March 2006. There is a continuing award so interest runs from 30 October 2005 to 31 March 2006.

If the enquiry was only settled by issuing a revised decision notice on 1 May 2006 then the interest runs from 30 October 2005 to 31 May 2006.

Example 2.

An enquiry for 2004/2005 establishes an error was also made in the 2003/2004 claim so an enquiry was also opened for that year during the enquiry window. Both enquiries can be settled with the issue of revised decision notices on 8 March 2006. There is a continuing award. Interest runs for 2003/2004 from 30 October 2004 to 7 April 2006 and for 2004/2005 from 30 October 2005 to 7 April 2006. Separate interest stencil will be completed for each year.

Although the guidance shown above relates to examinations and enquiries it more frequently relates to enquiries. In examinations settled before 5 April there will only be an overpayment where there is no entitlement or no future entitlement. Therefore, there will not be a continuing award. However, an overpayment may be established where an examination is not settled until after 5 April and if there is a continuing award this guidance will also apply.