CCM14500 - Closing the Enquiry: SA and TC Enquiries: Closure of cases and accounting procedures

The purpose of whole case working is to ensure that the SA enquiry does not inadvertently close the Tax Credits enquiry window and prevent the opportunity for a Tax Credits enquiry.

At the closure of the case, and to avoid double accounting, the SA Enquiry officer will account only for the SA Tax and where appropriate Interest / Penalties and associated NICs on the CQI workbench. The Tax Credits Consultant will account for the Tax Credits settlement on the Tax Credits workbench, including where appropriate interest and penalties.

Penalties

Depending upon the culpable amounts of tax and Tax Credits there will be occasions where:

• There is a penalty for taxes but not Tax Credits
• There is a penalty for Tax Credits but not for taxes
• There is a penalty to be applied to both.

The SA and Tax Credits penalties must each be applied each on their own merits.

Both disciplines are derived from different legislation, have different methods of calculation and abatement and if the debts reach Receivables they are handled differently.

For all these reasons two contract settlements are required although they may be completed at the same time.

• Issue two separate computations and two separate letters of offer, preferably under one covering letter
• Issue two separate letters of acceptance, preferably issued under one covering letter
• If you accept instalment offers on either or both sides, deal with the separate instalment offers, under existing instructions within the EM and CCM
• Send separate payslips (This text has been withheld because of exemptions in the Freedom of Information Act 2000) to Receivables.

See CCM10110 for examples of Tax Credits penalty situations.

Statement of Assets

Where a statement of assets is required the same statement is sufficient for both SA and Tax Credits purposes.

Certificate of Disclosure (COD)

Where the only risks addressed are income risks the taxpayer / claimant will be required to complete only the appropriate COD for the SA enquiry.

Where the enquiry has also addressed Tax Credits risks the taxpayer / claimant will be required to complete the appropriate certificates of disclosure in respect of both the SA and the Tax Credits enquiry.

Funding the settlement

There may be occasions when customers are unable to fund the whole amount of contract settlements for both SA and Tax Credits. In this event SA and TC should liase closely over the closing stages to agree an appropriate amount for each of the individual settlements, bearing in mind the taxpayer's/claimant's ability to fund the total settlement. It is suggested this is on a pro-rata basis unless the customer specifically requests it be split in a different way.

Payments on account

Where the customer makes a payment on account you should split it between the anticipated settlements on a pro rata basis if the amounts are know. If the amounts are not known it should be split equally between SA and TC. However, if the customer specifically requests a different split you should follow their request