Minutes of the Tax Credits Consultation Group (TCCG) meeting 11 March 2009

Attendees

HM Revenue & Customs

Tracy Gale (Chair)
Paul Gerrard
Phillip Dearne
Christina Smyth
Jenny Fox
David Skinner
Andrew Burland

Representatives

Maureen Arthur (National Association of Welfare Rights Advisors)
Siobhan Harding (Citizens Advice Northern Ireland)
Bernie O'Gorman (Local Government Association)
Fran Robinson (Local Government Association)
Jane Hayball (Local Government Association)
Sheau Yuan Chin (Taxaid)
Victoria Todd (Low Incomes Tax Reform Group)
Katie Lane (Citizens Advice)
Beth Lakhani (Child Poverty Action Group)
Brigid Campbell (Social Security Advisory Committee)
Matthew Lancashire (Citizens Advice Scotland)
John Andrews (Low Incomes Tax Reform Group)
Jane Moore (Institute of Chartered Accountants of England and Wales)
Angela Williams (Institute of Chartered Accountants of England and Wales)

Apologies

David Brodie (Taxaid)
Robin Williamson (Chartered Institute of Taxation)
Lindsay Isaacs (Citizens Advice Scotland)
Kevin Higgins (Citizens Advice Northern Ireland)
Frances Corrie (Taxaid)
Sylvia Gilbert (Local Government Association)
Fran Bennett (University of Oxford)
Paul Treloar (Disability Alliance)
Lucy Cochrane (Citizens Advice Northern Ireland)
Kate Bell (One Parent Families)

Welcome and introductions

Tracy Gale welcomed everyone to the meeting and introduced Paul Gerrard (new Director, Child Benefit Office and Tax Credit Office).

Operational priorities (Paul Gerrard)

Paul thanked the group for the opportunity to speak to them, and explained that he was now three months into his job as Director of the Child Benefit and Tax Credit Offices. Paul explained that he is therefore very much in 'listening mode', and so is open to representatives' thoughts, questions and comments.

Paul mentioned that at the last meeting Irene O'Brien and Stephen Younger from his area had spoken in detail about operational positions. He said that he would further update some of that information during this session, but said that he would like to take most of the time in discussion, with plenty of opportunity for comment.

Previously, as Director of the Tax Credits Transformation Programme, Paul said he had established a clear understanding of the kinds of things HMRC need to do earlier in the process for customers (before things may go wrong, rather than afterwards). He explained that the delivery operation he was now in charge of was on a big scale, and that he should have around 6,000 staff working for him from the beginning of April. He said that the progress that had been made previously had shown what can be done, but explained that big changes in direction, as trailed by the Transformation Programme can take time.

Paul mentioned three operational activities on which he wanted to focus:

• getting claims into payment
• dealing with disputes, complaints and reviews
• how HMRC work operationally with advisory groups such as those represented at the Tax Credits Consultation Group (TCCG)

Getting claims into payment

Paul said he sees claiming as the most important part of what could potentially be a 20 or 30-year relationship between customers and HMRC. Helping customers get the right money at the right time and to understand what they need to do was crucial.

At the last meeting, Paul said that Stephen Younger had answered some of the concerns that were expressed about delays putting some Child Benefit claims into payment and had explained some of the reasons for that.

Paul went on to say that in the last three months around 70 per cent of Child Benefit claims have been put into payment within nine days and that HMRC need to work to maintain that improved performance. Paul acknowledged that this left 30 per cent of claims which were not being processed as quickly and said that these were generally the more complex claims (such as those involving claimants from abroad where documents may need to be obtained, 'rival' claims for the same children, etc).

Paul said that some progress has been made in these areas, but that his aim is to further improve the situation. He invited comments from the representatives at or outside the meeting, on how his organisation could accelerate the processing of complex claims, which involved interactions with others where HMRC had no control over the processes or timetables there.

Dealing with disputes, complaints and reviews

Turning to disputes, complaints and reviews, Paul recognised that some tax credits customers had experienced unacceptable delays in these areas last summer. He said that significant progress had been made in turning that around in the last six months and that handling times were now much lower. Paul said that this situation would fluctuate and that there would be times of the year where handling times would increase but he said where this happens HMRC needed to provide explanations and be honest about expected timeframes.

Additionally, Paul recognised the need to improve the quality of responses as well as dealing with disputes and complaints as quickly as possible. He said that progress has been made and improvements have been seen in this area, but also said that examples submitted by some representatives recently showed that more needs to be done, and that ongoing (not 'one-off') monitoring and quality improvement initiatives are an important part of keeping things moving in the right direction.

Paul said that there was a lot of expertise in this area within HMRC, but he was keen to acknowledge that HMRC don't hold the monopoly on this, and that there is a need for HMRC to engage outside the department to draw on key knowledge, expertise and experience.

How HMRC work operationally with advisory groups

Paul mentioned the need for HMRC to work more effectively with external advisors to build on what is there currently. As an example, the Intermediaries Helpline for tax credits handles a large number of calls per week on more 'immediate' issues (such as where customers payments may have stopped for some reason), and HMRC are currently scoping volumes with the aim of introducing a similar service for intermediaries assisting with Child Benefit claims.

Paul also said that he had written to representatives recently about introducing a dedicated similar function for complex disputes and complaints where intermediaries are involved. He asked for representatives' help in pushing this forward, so that staff could see where things have gone wrong, and where improvements could be made. Paul said that he had seen a tremendous commitment from his staff since he took over as Director, and explained that he would be interested in hearing the groups' views on how HMRC could better interact operationally with them, especially around claiming.

Representatives commented in response to what Paul had said:

• Given the importance of training that had been mentioned, it could be worth investing in some direct 'face-to-face' contact with those customers who need it.
• Consideration should be given to writing-off overpayments from the first two years of the current system, which can be very hard to understand and to deal with.
• It may be useful to set up a pilot, possibly based in a Citizens Advice location and joined-up with an HMRC Enquiry Centre or Children's Centre, to 'experiment' with the current process with the aim of de-mystifying and solving problems.
• It is important to let people outside the department know as soon as possible if there are any problem areas or any slippage or changes to what has been said previously.
• How quality of responses is measured is an issue.
• It may be useful to seek to breakdown information in instances where there are delays.
• There seems to have been a recent increase in the number of Child Benefit appeals involving family breakdowns, and these appear to take a long time to resolve. No specific reason for this 'blip' increase could be identified.
• Face-to-face contact is an important issue, and a proactive response to tax credits from Jobcentre Plus offices is key, as they are often the main 'route-in', especially in times of economic downturn.
• Better communication between CBO and TCO is still an issue, and customers expect offices to be 'joined-up'.
• Smaller working subgroups of the TCCG have worked well and been very productive in the past, but many haven't met for a while now.
• Representatives would compile a note of areas where positive steps could be made for consideration by HMRC.
• The intermediaries team for disputes and complaints Paul had written about was a welcome move, but there are concerns around unrepresented customers in the light of recent responses, as they may not easily be able to spot where HMRC has made mistakes. It is also important for HMRC to give feedback when broader issues are highlighted to them (not just on individual claims).
• Some things representatives had been asked to comment on previously, such as the four-week run-on letter for customers, didn't appear to have progressed and no feedback had been given to reps since they were asked to comment.

Paul said that there were many extra targeted services available (assisted renewals, claim 'health check', etc.) and that the Segmentation Model helps to identify who should get that help, but he would really appreciate any assistance representatives could give in helping to refine that model.

Brigid Campbell explained that the Social Security Advisory Committee is looking at this issue in the Department for Work and Pensions, and that they are hoping to publish their findings within the next year.

Katie Lane asked whether there were any markers used to check whether/which customers were receiving the additional services available, and Paul went on to explain that there are three indicators used by HMRC:

• The size of the customer's award (if something goes wrong with a larger award, then the results are likely to be disproportionately more serious for that customer than for someone receiving a smaller award).
• The nature of the award (certain elements can make a claim for tax credits more complex. For example where there is childcare or where there are multiple incomes may mean there is more scope for things to go wrong).
• Behaviours. For example, HMRC may need to do something pro-active to engage with a customer who doesn't normally make contact over a long period of time.

Paul also said it is important to recognise that people can move between these 'groups'. He said that the assisted claims process will need to develop and look to identify when customers make contact how best to engage with them. He said that recent examples forwarded by Victoria from the Low Incomes Tax Reform Group could provide valuable feedback to the team, to help achieve real improvements.

David Skinner apologised for the delay in sending reps the revised copy of four-week run-on letter, and explained that a copy would be sent out as soon as possible after the meeting.

Appeals - Tribunal Reform (Phillip Dearne)

Phillip explained that the Tribunals Enforcement Act has introduced a new, two-tier appeals structure, and that this is being implemented in phases. There have been a lot of changes in language and terminology used but the process from the customer's side of things is essentially the same as before.

Phillip mentioned that the impact of the changes on HMRC has been relatively minor to date, with the main changes so far being that the TAS1 appeals letter issued when an appeals submission is prepared is now sent by the Tribunal Service, rather than by HMRC. Phillip said that HMRC were in the process of updating the appropriate appeals leaflets for customers, and agreed to circulate a copy of the revised draft to representatives as soon as possible.

Representatives had several issues to raise around tax credits appeals in general:

• Some customers may wish to appeal against the decision made on their claim as well a dispute an overpayment of tax credits, which can cause confusion. Customers almost always seem to be sent a disputes form and don't appear to be sent the appeals leaflet. The language HMRC used in the disputes form talks in terms of there being 'no right of appeal' against decisions to recover overpayments, and so people may have no idea further down the line that they could have appealed against entitlement decisions.
• Some appeals (especially those around entitlement issues as opposed to backdating or Right to Reside) seem to 'disappear' into the TCO and not emerge without reaching the tribunal. Representatives felt that there would be a greater onus on HMRC to provide information under the new appeals structure.
• There is facility under the new structure for a party to an appeal to be 'struck out'/excluded from proceedings if they fail to comply with any directives given by the tribunal, and also power for the tribunal to rule late evidence inadmissible.
• Many appeals seem to be 'settled' between TCO and the appellant, but there doesn't appear to be any analysis of how they came about and whether any lessons can be learnt from them.
• It is for the tribunal (not HMRC) to decide whether or not to accept a late appeal. Some HMRC staff appeared to have been telling claimants that there was no right of appeal beyond 13 months after a decision had been made.
• It would be useful to check that appeals are not being treated as reviews, as there is anecdotal evidence this may be happening.
• Some claimants were having overpayments 'written-off', when they wanted to appeal as their view was that they were never actually overpaid to begin with, and this could risk skewing overpayment figures.

Beth Lakhani from Child Poverty Action Group (CPAG) agreed to canvass and forward material on appeals, and Paul Gerrard said that he would like to take the issues raised on the operation of appeals at TCO away to look into and consider. Representatives suggested that it may be useful to re-start the appeals subgroup to consider, and Tracy Gale thought that perhaps a dedicated appeals meeting might be a good way to start to take this forward to resolve some of the issues raised. HMRC agreed to look into setting this up once the list was received from CPAG, and to contact representatives to see who might want to attend such a meeting.

Closer working with Customer Representatives (Christina Smyth)

Christina said she was pleased to meet the Group, and explained a little of her background and her new Operational Policy role within Child Benefit and tax credits. Christina said that this is to review whether HMRC are working as well as they might with Third Sector (non-governmental) bodies, keeping in view the Department vision around the need to help customers get things right first time. Christina said that it seemed like a good idea before starting out with this task to see whether the Consultation Group had any ideas on the best way to go about it.

Representatives gave their views on this issue:

• Third Sector organisations such as those represented at the Consultation Group had ongoing discussions with several different areas within HMRC (Individuals Customer Directorate, Tax Credit Office, Benefits and Credits, etc.), so they felt there was a lot to be done to join-up and streamline much of that work.
• Welfare Rights advisers should be treated in the same way as tax agents are. Low Incomes Tax Reform Group said that they had raised this issue before, and that they had a range of proposals in relation to it, including around separate sections on the HMRC website for intermediaries.
• Some representatives expressed their disappointment that they are asked to participate and comment on initiatives, but then those comments appear to be ignored by HMRC.
• Local Government Association representatives explained that they weren't 'Third Sector' as such, but that there is a lot they can do to feed into general advice as well as help with statutory functions.
• Beth Lakhani from Child Poverty Action Group explained that they often rely on feedback from their own advice lines, during training sessions, from research and from other agencies, and so their relationship is different to those organisations providing 'direct contact' such as Citizens Advice.
• The 'time-lag' factor because of the way tax credits works can sometimes get in the way (the ongoing nature of the scheme and the adaptability to changes can make it more complex to deal with than simply giving 'on the spot' advice).
• Representatives felt the need for a more effective communication feedback model, and a protocol agreed some years before had apparently never been taken forward.
• Smaller Working Groups could possibly resolve a lot of issues without the need to bring them to the larger Group, and so those other lines of communication should be opened-up.
• Recognising the authority of an intermediary to act is an ongoing problem, and HMRC need to look at this for both Child Benefit and tax credits claims.

Christina agreed to look at these issues as part of the task she was taking on, and said she would contact representatives to discuss ways of progressing this work.

Health in Pregnancy Grant and Childcare Affordability Programme (Jenny Fox)

Jenny gave an overview of the Health in Pregnancy Grant and its origins, explaining that it will be payable from 6 April 2009. Jenny said that the payments were originally vaunted in the 2006 Pre-Budget Report as an extension of Child Benefit to pay expectant mothers during their last weeks of pregnancy, but that factors such as Child Benefit paid in arrears meant that a one-off lump sum grant was a more practical and beneficial way to administer the scheme.

Jenny explained that the grant was worth £190, and will be paid in the twenty fifth week of pregnancy dependent upon the expectant mother having attended antenatal appointments and receiving advice from their midwife or doctor. Jenny mentioned that midwives were very supportive of the new scheme and thought it a useful incentive for people to attend antenatal clinics. The purpose of the £190 grant was initially to help avoid low birth weight but the grant itself can be used for any purpose by the expectant mother.

Jenny mentioned that the claim form for the grant was over two sides, split into four columns, and one of those columns is to be completed by the midwife. HMRC's aim is to pay the grant very quickly following receipt (in around a week or so) via an automated process and claim forms would be barcoded and only available from midwives. Initial issues around availability of forms were being resolved.

Representatives made the following points:

• They had seen a new leaflet entitled 'payment for parents' via DirectGov that lists help available which is administered by HMRC (tax credits, Child Benefit, Child Trust Fund and Health in Pregnancy Grant), but that there is a need to highlight cross-governmental assistance available to parents. As an example, take-up of Sure Start Maternity Grant is apparently low amongst people not in receipt of other benefits and so the Health in Pregnancy Grant could help to increase take-up and awareness of the Sure Start Grant. A joint leaflet with DWP would be useful around the 'package' of help available.
• Representatives felt that a leaflet would be useful, as midwives' main focus would not normally be on financial help available to parents.
• As the Health in Pregnancy Grant is payable only to the expectant mother (and not claimable by the father as an extension of Child Benefit could have been) then expectant mothers who are subject to immigration control or have no right to reside would not have the alternative option of their partner claiming, and so would be excluded from the scheme. Additionally, wording of letters of refusal for expectant mothers in these categories would need to be carefully chosen so as not to deter them from claiming Child Benefit or tax credits to which they may be entitled. HMRC said that HM Treasury colleagues would be keeping an eye on policy implications of the operation of the Grant and that it will be monitored in practice and Jenny confirmed that everything appeared to be on target for the introduction of the grant.

As regards the Childcare Affordability Programme, Jenny explained that this initiative was being sponsored by the Department for Children, Schools and Families. Jenny gave an overview of pilot exercises which are to be undertaken in various London Boroughs and elsewhere in the south east under the Childcare Affordability banner for children from birth to age 14. Jenny explained that part of the funding for this was coming from the London Development Agency, and that the pilots were likely to last up to two years. The outcomes would be fully evaluated.

Representatives' comments:

• the interface between additional help with childcare and Housing Benefit in particular needs to be fully considered as Housing Benefit entitlement may be reduced to take into account any extra payments received
• other factors unique to different areas would need to be considered beyond any initial pilots in the south east

Representatives also asked for more information in writing on this topic.

Update on discussion document (David Skinner)

David explained that there had been issues around the topic of possible 'in-year' finalisations that had been covered in last year's discussion document 'Tax Credits: improving choice and delivery' and as a result no timeframe could currently be given for the likely implementation of these measures.

David was able to confirm that HMRC propose to extend the operational policy across the board so that, following a household break up, HMRC would advise customers that they are seeking no more than 50 per cent recovery of any overpayment from each and that they would not be asked to pay back anymore where the other partner is unable to pay their share of the debt or where HMRC cannot trace the whereabouts of the other partner.

David also apologised for the delay in HMRC sending the revised working version of the Debt Management guidance, he mentioned that there may be some changes and said that it would be sent to representatives within the next two days.

Representatives raised issues around instances where tax credits customers receiving help with childcare have subsequently found themselves with overpayments because HMRC have discovered that the Childminder has lost their registration status (without the customer's knowledge). HMRC agreed to look into this.

HMRC confirmed that the Financial Secretary to the Treasury was actively considering the Notional Entitlement issue that had been discussed previously, and David said that HMRC would report back any further developments on this to representatives once they had them.

John Andrews from the Low Incomes Tax Reform Group mentioned that representatives were still seeing examples of Helpline advisers refusing to issue claims forms to potential customers who had high previous year's income but who may need to make 'protective' claims. This is particularly important given the current economic situation where an increasing number of people may need to make such claims. HMRC agreed to look into this