CCM17270 - Discrepancy Examinations: Action: Considering income discrepancy

Estimated income for current year

Post-award examinations: If the claimant asks for the award to be based on their estimated income for the current year, close the case according to CCM17360

Gift Aid payments, pension contributions and trading losses

Claimants are entitled to deduct from their income:

• Gross payments to charity under Gift Aid
• Gross contributions to an HMRC registered pension scheme
• Trading losses

Working Sheet TC825 helps claimants to work out these amounts. There is not a separate box for claimants to record these amounts in on the claim form or renewals form. They should deduct them from their income in the following order:

• Taxable Social Security Benefits
• Employed income
• Self-employed income
• Other income

This means that if they have made £500 Gross payments under Gift Aid and their earnings are £7,700 they will declare income of £7,200 for tax credit purposes. The P14 will show £7,700 but the claimant has declared the correct figure on their claim or renewal notice.

Other Discrepancies

For detailed information on things to consider in income discrepancy cases involving:

• Taxable Social Security Benefits, see CCM17280
• Employed income, see CCM17290
• Company cars and fuel, taxable vouchers and payments in kind, see CCM17300
• Self-employed income, see CCM17310

If necessary ask your manager for advice.

You will not normally investigate income discrepancy cases involving other income.

For more information on income see the Tax Credit Technical Manual