Method Of Payment (Info)

The two ways in which tax credits can be paid are

• Direct to the nominated recipient

Or

• Payment via employer (PVE)

Direct payment to the claimant is made by

• Credit transfer into a bank account ( BACS)

Or, only in exceptional circumstances

• A giro cheque ( giro) which is posted to the recipient’s address

WTC will be paid by PVE wherever possible. PVE cannot be used if the nominated main earner is self employed. Payments will be made direct to the nominated main earner if PVE is not possible. An example of when PVE is not possible is where the nominated main earner is self-employed.

PVE payments are given 42 days lead in time prior to starting or stopping payment. This is to allow an employer the time to process the instruction to pay through their payroll or to acknowledge that payments have ceased. WTC will be paid direct to the nominated main earner during the lead in time. Shorter lead times can only be set up with the agreement of the employer.

The methods of payments in order of preference for WTC (excluding the child care element) are

• PVE

• BACS

And

• Giro

The methods of payment in order of preference for CTC (including the child care element of WTC) are

• BACS

And

• Giro

If the claimant has opted for payment by BACS but has provided invalid bank account details, their payments will be made by giro. This will result in a verification failure. When the verification failure has been resolved the payments will switch to BACS.

If a claimant is entitled to more than one tax credit, paid at the same frequency and by the same method of payment, the payments will be combined into a single payment.

Note: PVE lead in time payments will always be paid separately as they are paid at a different frequency than any other payment.