TCTM09430 - Decision Making: Revised decisions, considering evidence and recording of decisions: Official Error

Official error as defined at s21 of the Tax Credits Act (TCA) means where the department or someone acting on behalf of the department (specific description at TCTM09530) have made a mistake.

To allow a s21 decision to be made:

• the new decision must be in the claimant’s favour, and 
• the claimant must not have materially contributed to the error

Note: A decision made using s21 may only be revised at any time not later than five years after the date of the decision. (Prior to 06/04/10 this read as five years after the end of the tax year to which the decision relates).

Difference between a s21 decision (official error) and a remittance of an overpayment under CoP26 using a remission code on the Tax Credit computer system which is titled ‘official error’ (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

There is a difference between overpayments remitted under CoP26 and the true legislative meaning of official error as set out above. A revision under s21 is a new decision to replace an earlier decision on the award amount, the award period or rate of entitlement. The new decision must also be in the claimant’s favour (therefore an increase). This new decision generally reverses/amends the earlier decision that created the overpayment; hence the overpayment no longer exists. The five year time limit mentioned above applies to these sorts of decisions.

A remission of a debt under CoP26 because of HMRC error for example (This text has been withheld because of exemptions in the Freedom of Information Act 2000)does not change the decision on the award amount, award period or rate of entitlement. The overpayment still exists, however HMRC take the decision not to recover this overpayment (sometimes called a remittance). There is no time limit on a decision to remit a debt under CoP26.

Note: The definition of appropriate office at TCTM09530 is only valid for official error decisions. The definition of appropriate office for all other parts of tax credits (for example making a claim) is defined at TCTM06101