Nigel Jordan (Chairman)
Kevin O’Hanlon (Secretary)
Irenka Timlin
Andrew Burland
Chris Fox
David Skinner
James Snook
Anne Palmer
Nita Hart
Sarah Percy
Adrian Dixon
Claire Dolling
Simon Williams
Gio Marino
Gary Haythornthwaite
Mick Ney
Liz Welsh
Nick Burkitt
Kate O’Reilly
Roger Pugh
John Andrews - Low Incomes Tax Reform Group
Jane Hayball - Local Government Association
Frances Corrie - TaxAid
Sylvia Gilbert - Local Government
Andrea Bedell - Citizens Advice NI
Beth Lakhani - Child Poverty Action Group
Fran Bennett - Joseph Rowntree Foundation
Richard Exell - TUC
Peter Gravestock - Association of Tax Technicians
Lindsay Isaacs - Citizens Advice Scotland
David Kinloch - Local Government
Katie Lane - CAB
Fran Robinson - Local Government
Kate Bell - One Parent Families
Robin Williamson - Low Incomes Tax Reform Group
Jane Moore - Institute of Chartered Accountants of England & Wales
Nigel welcomed everyone to the meeting.
HMRC said that the minutes of the meeting held on 7 March would be finalised shortly, when comments received from representatives in the previous week had been considered.
Representatives raised the following points:
Since the discussions at the January meeting, Simon had shared with representatives a copy of the draft guidance on streamlining the process for TCO referral of tax credits complaints about overpayments at Tier 3 to the Adjudicator’s Office.
Representatives asked a number of detailed questions about the operation of the pilot, and the Adjudicator’s Office’s approach when reviewing complaints. They said that they valued the independence of the Adjudicator and had reservations about customer perception of their close working with TCO. Representatives remained unhappy about the lack of appeal rights against the recovery of tax credit overpayments.
Simon again extended an invitation for representatives to visit the Adjudicator’s Office and agreed to answer any further questions by email, if any arose after the meeting.
The report on fast-track claims mentioned at the last meeting is still in draft in Jobcentre Plus; it does not cover Northern Ireland. Citizens Advice NI said that Northern Ireland also have problems with fast-tracking and suggested there should also be discussions with the Social Security Agency there. Representatives would like feedback and more information in due course.
Representatives had seen examples where Jobcentre Plus advisers do not always tell customers about claiming Child Tax Credit when it is appropriate for them to do so. DWP said they would look at the specific example to see what lessons could be learned.
A paper by LITRG had been given wide circulation within both Departments and had been discussed at the HMRC and DWP liaison meeting on 15 May. Members of that liaison group will be looking at the details and will report back to that group.
Representatives queried the liaison HMRC had had with DWP on the introduction of the 4 week run-on of WTC. HMRC confirmed they had consulted with DWP officials in the short time they had to introduce the new arrangements following the Budget announcement.
HMRC explained that notional entitlement arises where a claim has been made in the wrong capacity - typically where a single claim to tax credits is made which should have been a joint one with a partner. Where an incorrect claim is made in this way, any tax credits paid under that award are overpaid. Since May 2005 compliance officers could reduce the recoverable overpayment to reflect the amount of tax credits that would have been payable if the correct claim had been made. Although this practice became known as notional entitlement or notional off-setting it is a mis-description. There is no entitlement; HMRC simply remitted all, or part, of the overpayment in this way.
Representatives had suggested HMRC should apply a consistent approach and should therefore have a similar practice for overpayments in cases that did not arise from compliance activity - typically where a customer has not told HMRC that a partner has joined or left a household. HMRC felt that, although there is a similarity in the scenarios, a late report of a household change is not what the 2005 treatment was intended to cover.
HMRC had reviewed the position and, following discussions with interested parties, reported to representatives that the apparent inconsistency of approach could not continue - with immediate effect, the existing practice of notional entitlement will end. HMRC said that the Claimant Compliance manual will be amended from June. They confirmed that TCO and Helpline will have similar guidelines.
In summary, for any compliance case opened from 17 May 2007 notional entitlement will only be available in very exceptional circumstances – that is, where an incorrect claim was made out of a genuine error where the customer was muddled or confused. In addition, from 17 May 2007 it will be available where a customer contacts the TCO or a Contact/Enquiry Centre to say they made an incorrect claim as a result of a genuine error. Therefore it will be available to all cases involving genuine error whether worked by compliance or TCO. HMRC said that notional entitlement will not be available where there is a late notification of a change in circumstances.
Representatives were disappointed with the outcome. HMRC said that every case would be considered individually, taking the claimant’s particular circumstances into account.
HMRC outlined the outcomes from a workshop with key stakeholders to identify improvements to the process for new fast track customers, which they are now considering. The intention is to encourage Jobcentre Plus advisers to identify more cases as fast track and ensure these are processed quickly through changing the process.
Representatives had the following suggestions for HMRC to consider:
Helpline availability remains very good. This is a busy time with the renewals period but Contact Centres are well prepared.
TCO reported that their workstate remains in a healthy position, with renewals clearance ahead of target and new disputed overpayments still being cleared within 4 weeks.
Representatives reminded HMRC that they had raised a number of queries about debt management in the previous week and added the following:
Post meeting note: Collection of an overpayment will be suspended:
HMRC outlined their thinking on penalties for tax credits and invited representatives to send any comments by mid-June.
HMRC said that the 4 week run-on regulations had been laid. Working Tax Credit will be treated as income for the purposes of Income Support and Jobseekers Allowance calculations. The amount of WTC for the 4 week run on will be shown in a letter sent to the claimant under the clerical process being used this year – it mirrors the amount of WTC they were entitled to immediately before the entitlement stopped, including any childcare element.
Representatives had a number of queries around the effect of the run-on, on ‘passported’ benefits. HMRC confirmed that
Representatives asked if they could see a copy of the proposed letter.
Representatives asked for information about the way appeals get to the Appeals Service.
HMRC said that initially they try to settle by agreement. If they cannot do this they will prepare a submission which they send to the Appeals Service, with a copy to the appellant. (If an “appeal” is clearly a disputed overpayment the claimant’s dispute will be passed on to the Disputed Overpayment team to take forward. HMRC said that they write to the customer to tell them what is happening and ask the customer to let them know if they really did want to lodge an appeal against the decision on entitlement. If it is not clear whether the customer wants to appeal, or dispute an overpayment, then it is treated as an appeal.)
Representatives asked that, if a customer wanted to have their appeal heard by a tribunal rather than settle by agreement could they do that? HMRC said claimants did not have to enter into discussions to settle an appeal by agreement, but tribunals might expect customers to try to settle differences before any formal hearing.
Representatives said that they had seen some examples of customers receiving letters asking them to withdraw their appeal without HMRC having addressed/answered all the points. HMRC said that this was not the aim or their understanding and asked representatives to provide them with examples for them to review.
HMRC confirmed that letters in response to appeals should have a name and telephone number shown. They asked representatives to provide examples if this does not happen.
HMRC said that an aligned process for tax credits and Child Benefit should be in place by the end of May; they will write to representatives with further information.
Representatives queried a reply they had received from HMRC about arrangements following separation of joint claimants. HMRC said that they will look at the issue again.
HMRC confirmed that they will set up a Working Group to look at migrant issues - an invitation will be issued to representatives.
Childcare: there had been a meeting on 19 April which discussed a number of policy questions raised by representatives. HMRC and Treasury officials took away a number of action points for follow-up and will report back to the Working Group in due course. A further meeting of the Working Group will be held as necessary.
CoP26: meeting to be held on 22 May 2007.
Passporting: meeting to be held in June.
HMRC confirmed that contributions to the Working Groups could be done by email, acknowledging it can be difficult for representatives from Northern Ireland to attend these meetings.
HMRC said that there will be a change to the existing on-line service at the end of June and the beginning of July while a format change is introduced.
HMRC said that they would ask the Treasury to attend the next meeting to talk about the 3rd Money Laundering Directive if there was a desire for information.
HMRC said that the overpayment and underpayment statistics would be published on by National Statistics on 22 May 2007.
Representatives asked HMRC to send written replies to their queries regularly and, preferably, well in advance of the Consultation Group meetings. HMRC confirmed that replies can be shared with other members of their organisation unless they are marked as confidential.
Representatives said that they receive acknowledgements for appeals and complaints but not from other teams. HMRC said that it was not Departmental policy to acknowledge all correspondence but suggested Representatives could send examples to the secretary who will pass them to TCO to consider.
Representatives asked what was happening with DWP guidance about the Child Benefit Extension period. HMRC said that there is to be meeting about this and they will provide further feedback in due course.
Representatives asked for contact names and numbers for the Disputed Overpayments team so that they could speak direct to decision-makers on particular cases.
Representatives said that there have been occasions where TCO do not appear to have received registered post. HMRC asked them to provide some specific examples to enable them to investigate and see whether the post was delivered to TCO.
HMRC reminded representatives of the telephone number for the orderline for bulk orders of tax credits claim forms - 0845 366 7820 (fax 0845 9000 604).
HMRC said that the next meeting will be on 11 July at 100 Parliament Street, London.
