Explanation Of Overpayment - Referral Or Letter Received (AG)

• An Enquiry Centre, by Taxpost Direct
   
• A Contact Centre, through a Work Area Mailbox (WAM)
   
• DMB, by Taxpost Direct

Or

• A letter received from the claimant

• Before you continue with the guidance in this Action Guide, follow the guidance in Action To Take Before Processing A Claim Or Work Item

Then

• If you can continue to action the referral form, go to step 2

Follow the guidance in Calculate And Remit An Overpayment – For Cases Suspended On Or After 30/10/06 from step 1 and steps 5 to 34 to determine the reason for the overpayment

• If you determine that there are one or more reasons for the overpayment and they fall into the following categories - Cross Border, Family Supplement case or a Complex case

• Pass the case and all the relevant paperwork to the relevant European Economic Area (EEA) Team. Your manager will be able to provide you with the relevant details
   

• Use Function MAINTAIN HOUSEHOLD NOTES and select the ‘Debt Recovery’ category to record the following

‘TCMZ **DOP Explanation requested *Cross Border / Family Supplement / Complex case (delete where applicable) case papers sent to the European Economic Area Team by XXXXX group XX’

Notes:

You must follow the guidance in How To Correctly Complete Application And Household Notes when you record the note

And also

Follow the guidance in Maintain Household Notes

• Take no further action

• If you determine that corrective action needs to be taken and it is not a Cross Border, Family Supplement case or a Complex case

• Consider updating the award. Follow the guidance in Calculate And Remit An Overpayment – For Cases Suspended On Or After 30/10/06 from step 35 onwards

• If you determine that HM Revenue & Customs (HMRC) has failed one or more of its responsibilities and this error contributed to the overpayment

• Calculate how much of the overpayment is due to HMRC error. Follow the guidance in Calculate And Remit An Overpayment – For Cases Suspended On Or After 30/10/06 from steps 36 to 51
   

• Remit the amount of the overpayment you have calculated. Follow the guidance in Make Or Cancel A Remission

Note: Use remission class 5b (official error) and complete the Remissions database with details of all the remissions you make

Then return to this guidance

• Go to step 3

• If you determine that no corrective action or remission needs to be taken and it  is not a Cross Border, Family Supplement case or a Complex case, go to step 3

Note: If the request for an explanation of the overpayment has been sent by an authorised intermediary or an agent for the claimant(s), go to step 10

• If you make contact with the claimant

• Explain how their overpayment has occurred
   
• Tell them if you have remitted all or part of the overpayment because HMRC has failed to meet one or more of its responsibilities

Then

• Ask the claimant if they are satisfied with the explanation

• If the claimant is satisfied with the explanation, go to step 8
   
• If the claimant is satisfied with the explanation and asks for repayment details, go to step 4
   
• If the claimant is dissatisfied with the explanation and they wish to dispute the overpayment, go to step 9

• If you are unable to contact the claimant, go to step 10

• Direct recovery
   
• Cross year recovery
   
• In year adjustment

Note: It is possible to have both an in year adjustment and cross year recovery on one award

• Go to step 5

• Use Function VIEW AWARD and go to the Select Award Version screen
   
• If the award is ‘Terminated’, ‘Ceased’ or ‘Finalised to Nil Award’, direct recovery is taking place. Explain this to the claimant

• If the claimant requests more time to repay a tax credits overpayment

Or

• If the claimant would like to pay the tax credits back in instalments

• Follow the guidance in Claimant Would Like To Extend Date To Repay Their Overpayment (Setting An Informal Arrangement)

Then

• Return to this guidance and go to step 8

• If the claimant is satisfied with the explanation, go to step 8

• If direct recovery is not taking place, go to step 6

• Use Function VIEW HOUSEHOLD ACCOUNT and go to the View Award Period Summary screen for the relevant award
   
• Click on the [Schedule] button. You will be taken to the View Direct Payments Schedule screen
   
• Check the Amount Recovered column

• If an amount greater than zero is displayed, cross year recovery has been applied

• Explain this to the claimant. Follow the guidance in How Payments Are Profiled

Then

• Go to step 7

• If only zeros are displayed, cross year recovery has not been applied. Go to step 7

• Use Function VIEW HOUSEHOLD ACCOUNT and go to the View Award Period Summary screen for the relevant award
   
• Click on the [Postings] button. You will be taken to the View Award Period Postings screen
   
• Identify the first award posting where the regular payments have been reduced

Note: Award postings have the description ‘Amended WTC/CTC Award’. Where there are two postings one after the other, then the award has been re-profiled

• From this date, check for an award posting where the claimant’s entitlement has dropped. To do this

• Work backward from the posting date as far as the frequency of regular payments, either 7 or 28 days. Look for award postings together. There will be a plus and a minus figure. Where the minus figure is greater than the plus figure the award entitlement has dropped and in year adjustment has been applied

• If there are posting types of ‘Manual Giro Payment’ and there has been a re-profiling on the award, in year adjustment has been applied
   
• If there are no manual payment postings, look for evidence of posting corrections. To do this

• Click on the [Summary] button. You will be taken to the View Award Period Summary screen
   
• Click on the [HH Notes] button. You will be taken to the View Household Notes screen
   
• Check all the entries for the following message

‘Posting correction XX/XX/XX’

If this message is present, in year adjustment has been applied

Then, when you have determined that in year adjustment has been applied

• Explain this to the claimant. Follow the guidance in How Payments Are Profiled
   
• Go to step 8

• ‘TCMZ Explanation of O/P given over the telephone to Clmt 1* / Clmt 2*. O/P is on single* / joint* household for tax year 03-04* / 04-05* / 05-06* / 06-07*. O/P reason is due to Compliance* / Contra Error* / Manual Payment* / Incorrect Data Entry* / Change of Circumstances* / Renewal Termination* / Misadvice* / System Error (please specify)* / PVE* (* delete as appropriate)’
   
• 'TCMZ Overpayment of £xx.xx remitted in full*/part* due to official error. *Amount of Overpayment not remitted £xx.xx. Tax Year xx/xx/xx. Group xx. Team xx'

Note: You must give dates, amounts, and award versions where appropriate to provide clear information for anyone looking at the case
 

Notes:

You must follow the guidance in How To Correctly Complete Application And Household Notes when you record the note

And also

Follow the guidance in Maintain Household Notes

Then

• If the claimant is satisfied with the explanation, go to step 12
   
• If the claimant is not satisfied with the explanation, go to step 9

• A Code of Practice 26 (COP 26), ‘What happens if we have paid you too much tax credits?’

And

• The form TC846 'Request to reconsider recovery of tax credits'

Then

• Go to Step 11

Note: If you have come here from step 3 and the request for an explanation of the overpayment has been sent by an authorised intermediary or an agent for the claimant(s), issue the letter to them and not to the claimant

Note: In household breakdown cases, if the overpayment has changed, a separate letter must be issued to each claimant.

Note: If the overpayment has not changed, issue one letter to the claimant who requested the explanation

Then

• Go to step 11

• If you have come here from step 9, record the following

‘ OD34 - COP 26*, explanation letter* and form ‘Request to reconsider recovery of tax credits’* issued to clmt 1* / clmt 2*. O/P is on single* / joint* household for tax year 03-04* / 04-05* / 05-06* / 06-07*. O/P reason is due to Compliance* / Contra Error* / Manual Payment* / Incorrect Data Entry* / Change of Circumstances* / Renewal Termination* / Misadvice* / System Error (please specify)* / PVE* (* delete as appropriate)’

• If you have come here from step 10, record one or both of the following messages, as appropriate

‘ OD35 - explanation letter, issued to Clmt 1*/Clmt 2* /*Authorised Intermediary / Agent. O/P is on single*/joint* household for tax year 03-04*/ 04-05*/ 05-06*/ 06-07*. O/P reason is due to Compliance*/ Contra Error*/ Manual Payment*/ Incorrect Data Entry*/ Change of Circumstances*/ Renewal Termination*/ Misadvice*/ System Error (please specify)*/ PVE* (* delete as appropriate)’

'TCMZ Overpayment of £xx.xx remitted in full*/part* due to official error. Tax Year xx/xx/xx. *Amount of Overpayment not remitted £xx.xx. Group xx. Team xx'

Note: You must give dates, amounts and award versions where appropriate to provide clear information for anyone looking at the case

Notes:
 

You must follow the guidance in How To Correctly Complete Application And Household Notes when you record the note

And also

Follow the guidance in Maintain Household Notes

Then

• If the claimant has mentioned they have been declared bankrupt or sequestrated, follow the guidance in Claimant Declared Bankrupt Or Sequestrated

Otherwise

• Go to step 12