Minutes of the Tax Credits Consultation Group Meeting 26 March 2008

Attendees

Jane Kennedy (FST)
Cerys Morgan
Kathryn McKerrow

HMRC

Nigel Jordan (chair)
Les Searle
Kevin O’Hanlon
Lisa Billard
Chris Fox
Irene O’Brien
Tracy Kirkham
David Skinner
Andrew Burland

Adjudicators Office

Simon Oakes

Representatives

John Andrews - Low Incomes Tax Reform Group
Kate Bell - One Parent Families
Lucy Cochrane - Citizens Advice (Northern Ireland)
Frances Corrie - TaxAid
Sylvia Gilbert - Local Government Association
Peter Gravestock - Association of Taxation Technicians
Jane Hayball - Local Government Association
Lizzie Iron - Citizens Advice
Beth Lakhani - Child Poverty Action Group
Katie Lane - Citizens Advice
Jane Moore - Institute of Chartered Accountants of England & Wales
Bernie O’Gorman - Local Government Association
Victoria Todd - Low Incomes Tax Reform Group
Robin Williamson - Chartered Institute of Taxation/Low Incomes Tax Reform Group

Apologies

Fran Bennett - University of Oxford
David Brodie - TaxAid
Pauline Hunter - Disability Alliance

1. Welcome and introductions

Nigel welcomed everyone to the meeting. He introduced Jane Kennedy, the Financial Secretary to the Treasury (FST) who was attending the meeting to talk to the representatives about tax credits.

2. FST attending

The FST said that she was pleased to be invited to attend the meeting, and explained that:

she wanted to hear representatives’ views on how things are going
as a way of getting to know more about tax credits she had done a 360º review with officials
new big investment for tax credits new IT is not possible due to the current economic climate
she had taken a close interest in the review of CoP 26, which addressed perceived injustices

The FST said that specific initiatives were announced in the Budget. HMRC will:

proactively contact vulnerable customers during the 2008 renewals window and offer them additional support to renew their claims
roll out new services to make the process of claiming tax credits easier and quicker for the customer. HMRC will also help customers to keep their claims up to date to help avoid overpayments
work with Children’s Centres to pilot different ways and locations for providing advice and services
introduce a new ID authentication service to help reduce tax credits error and fraud
support the introduction of these services with improved communications products

The FST said that, building on these improvements and as set out in the Budget, she hopes to publish a paper on tax credits later in the year.

In response to points made by representatives the FST said:

She would look into whether it is possible to have dedicated tax credits helpline telephones in Job Centre Plus offices.
She would look into the impact of the Disability Equality Scheme on tax credits.
She would need to discuss with DWP minister Stephen Timms whether HMRC could introduce an ID Authentication Service which would mirror the service DWP are currently working on.
HMRC are already working with the Adjudicator’s Office on appeals and the right of appeal.
400,000 customers claim childcare costs. Individuals should have flexibility to decide how their payment is used. The FST said that she would welcome an ‘Oyster Card’ approach.
She is hoping to have resolution about notional offsetting soon although there are still issues to resolve.
There is still work to be completed on a child disability scan but she is looking to conclude this.

The FST thanked the members of the Tax Credits Consultation Group for their hard work. She stressed that the input from the group is very helpful and appreciated.

3. Representative agenda items

Representatives:

Raised some concerns about the need for a team to take ownership of difficult cases to see them through to resolution. HMRC confirmed that a complex cases team did exist and they would circulate a note about the team and how representatives could make contact.
Asked how the work around tax credit debts will be taken forward. HMRC said that Des Dolan will be taking this work forward and he will be holding a meeting shortly about this.

HMRC said that, when a customer contacts them to advise that DWP are also recovering an overpayment, they will consider suspending recovery of an overpayment. Representatives asked if this applied to all DWP debt recovery. HMRC said that they would need to consider this. Representatives said that they will write to HMRC querying the position where, for example, recovery is taking place on a Social Fund debt.

HMRC said that they do pursue both parties in household breakdowns. They said that each party can pay over different timescales where, for example, the financial situation of one of the ex-partners means that they need a longer timescale to pay back their share of the overpayment. Representatives said that they are still getting examples where this is not the case. HMRC asked representatives to send specific examples so that they can investigate what has happened.
Asked whether HMRC will collect more statistics on recovery, particularly under Gender Equality legislation. HMRC said that they aim to give an update of providing this information at the next Debt meeting.
Asked HMRC to circulate the statistics on the number of cases written off for hardship.
Said that a simple leaflet on collecting debt could be a good idea to bring clarity and consistency of approach. HMRC said that this is being considered.
Asked when HMRC aim to complete the improvement work around the management of debt. HMRC said that they are already looking at the handling of escalated cases, and that they will need to check other issues and will write to the representatives about this.
Said that recent consultation proposed the facility to recover tax credits debt from overpayments of tax and asked how HMRC proposed to implement this. They said this will remove choice from the customer and there is no right of appeal. They said that there is a need to prove the debt is correct before recovery commences.
Asked whether customers could be notified that there are three ways in which to repay an overpayment. HMRC said that they will consider this.
Asked whether HMRC will issue a claim form if the calculator shows that the customer is not entitled to tax credits. They said that a claim form should be issued if a customer is eligible. HMRC said that they have clarified the order of Helpline Guidance but they need to ensure that they have got the process right. HMRC said that they will look at the process and feedback to representatives.
Asked if redress will be paid if a customer loses out because the Helpline refuses to issue a claim form. HMRC confirmed that redress should be paid if a customer loses out because of a mistake by HMRC.
Said that there are outstanding action points around fast track. HMRC said that they are working to clarify these points. They confirmed that they are working closely with DWP and looking at the escalation route for fast track claims.
Asked HMRC whether the fast track escalation process should be changed so that claimants are dealt with by HMRC rather than being sent back to JC+
Asked why the turnaround for fast track claims is now 10 days when it was previously seven days. HMRC said that they will clarify the target time and report back to representatives.

Post-meeting note: We have confirmed that the turnaround time for fast-track claims is still seven days.
Asked what the normal claim target is. HMRC said that it will provide this information.

Post meeting note: The current TCO target is to decide 86 per cent of new claims, renewals and changes of circumstances within five working days of receipt.
Asked how customers receiving tax credits know how to make a complaint. They felt that tax credits do not make it easy for a customer to complain. HMRC said that it is usually easier if a customer complains in writing, so that there are no misunderstandings. They said that they are improving arrangements whereby details of a complaint are taken over the phone and are referred to TCO.

Representatives said that the TC600 notes direct customers to the HMRC website if they want to complain. HMRC said that they will look into this.
Asked whether the helpline scripts contained advice agency lists. HMRC undertook to find out if the scripts held this information.
Said that the childcare indicator needs to be uprated from 6 April so that customers can make informed decisions when choosing voucher companies. HMRC said that they have already passed these comments on to colleagues responsible for the indicator. They asked representatives for their views on the indicator.

Representatives said they felt that HMRC should have more control over the voucher companies, to avoid any danger of customers being ‘mis-sold’ vouchers. They suggested that a step by step guide showing customers how to calculate what is best for them may be better than the current indicator. HMRC officials agreed to pass the representatives’ further comments to appropriate colleagues.
Asked what action HMRC will take to clear old disputed overpayments. HMRC clarified that they do not have a build-up of unworked cases, but reminded representatives that some disputes were affected by the administrative issue last year. They acknowledged that some cases are taking longer than they would like.
Raised concerns about the delays in disputes, appeals, explanations and complaints.

4. C-MEC access to HMRC data

HMRC said that the Child Maintenance and Enforcement Commission (C-MEC) is being established to replace the Child Support Agency (CSA). HMRC said:

The legislation that provides the authority for C-MEC has an exchange of information clause with HMRC (this mirrors the existing one in the Tax Credits Act).
Customers will be told about the existence of CMEC when they contact HMRC following a household breakdown. Customer details will only be passed to CMEC if the customer agrees. There are financial reasons to agree in that any maintenance paid will not be taken into account for tax credits purposes. However nothing further will happen if the customer does not agree for their details to be forwarded.
In the short term the contact between HMRC and C-MEC will be done through a manual process. There will be an eventual IT solution to identify those customers who agree to being contacted by CMEC.

Representatives asked:

how HMRC will ensure confidentiality of information, particularly where customers move from one relationship to another
whether C-MEC will gather information from National Insurance data before tax credits

HMRC said that they will send information out to the representatives on these points.

Representatives asked who they can contact in HMRC for more information about taxable income used by C-MEC to calculate maintenance. HMRC said that they will find out who is the most appropriate tax official and will send these details to the representatives.

Post meeting note: Raja Dasgupta is the HMRC contact point and he can be contacted by email.

5. Working Group updates

Migrants and Immigration

The last meeting in March:

Agreed that the draft leaflet ‘Tax credits & coming to and leaving the UK’ would be developed internally with a view to early publication.
Supporting help sheets on a number of topics covering issues relevant to not only migrant workers would be produced initially as web-based products. These include ‘What constitutes a couple for tax credit purposes’ and ‘Calculating income if you are self-employed or employed’.
A new help sheet covering cross-border working in Northern Ireland is also to be produced.

The next meeting will be in July.

HMRC agreed to feed John Andrews’ comments that the draft migrants leaflet should include income tax changes from April 2008 to Irenka Timlin.

Passported benefits

The last meeting was on 8 February.

The operation of the Healthy Start scheme for clerically maintained customers.
The operation of the system for claiming court fees.
DWP disallowing claims for Sure Start Maternity Grant because no qualifying benefit is in payment. Representatives said that they would like to see DWP hold onto claims pending the award of tax credits but DWP is unable to agree to this.

Work has been completed on the tax credits uprating and the impact on passported benefits leading to a review by most providers of the income threshold for qualifying. HMRC have written to representatives outlining key changes and have arranged for leaflet WTC6 to be updated.

The next meeting will be in May.

Representatives asked if HMRC can go back to DWP about Sure Start Maternity Grants. HMRC said that they will consider this.

Representatives said that issues at the Passported Benefits Working Group are just discussed and are not resolved. Nigel Jordan said that he will try to attend the next meeting of the Working Group.

Complaints and redress

The last meeting was on 19 February.

Suspension of collections of overpayments. HMRC are looking into the feasibility of suspending cases when the customer requests an explanation of their debt and suspending cases where the complaint has been going on for a substantial period.
The enhanced process of dealing with complaints, disputes, reviews and explanations on the new CSSG teams.
When HMRC will pay redress and their approach. HMRC will provide feedback on what information about redress is on the Internet and whether the new CSSG teams consider redress on all cases.

Representatives asked for the minutes of this meeting. HMRC will ask the chair of this Working Group to look into this.

Website

HMRC said that the web content is now being built and will go live at the end of April.

Representatives agreed that there should be a meeting of the Website subgroup. HMRC said that invitations will be sent out once the go-live date is known.

Disability

The last meeting was in February. Forms for DWP were discussed, as was the ‘data-scan’ exercise. Final arrangements around backdating/ex-gratia payments, etc are still being discussed. HMRC said they would provide a further update at the next meeting due to take place in April.

HMRC said that they will arrange a further COP 26 meeting. Representatives suggested that this would be useful in approximately six months time to discuss how the new COP 26 is working.

HMRC said that they will prepare a template showing activity in the working groups. This will be issued with the agenda for future Consultation Group meetings.

7. Update from Simon Oakes, Adjudicator’s Office

Simon explained that:

The Adjudicator’s Office welcomed the revised COP 26, but said that it is too early to comment on how it is working. He said that he will come along to a future meeting to discuss its progress.
The Adjudicator’s Office is still receiving a high number of cases. He said that turnaround times will not be as good as last year for this reason. Reorganisation of the Adjudicator’s Office had affected approximately 220 cases. The new COP 26 also impacted turnaround times. Turnaround times this year will be on average 23 weeks, with some cases taking up to around 44 weeks.
The Adjudicator’s Office had acquired additional resources from HMRC. They plan to have an extra ten staff, which is an increase of 40 per cent. These staff will require training once they are recruited.
Process assured cases are being dealt with in around 17 weeks. He said he will provide the figures for other cases.
The upholding rate for last year was 56 per cent, it will be down slightly this year.

Representatives said that there is less and less reference to the Adjudicator in tax credits literature and asked Simon to comment. Simon explained that a complainant should not come to the Adjudicator’s Office until the HMRC process has been followed. Simon said that the Adjudicator’s Office receive a lot of contacts outside their remit. They have made a decision to try to limit these contacts as they are not staffed to deal with them.

Simon said that there is an issue about whether the Adjudicator’s Office is visible enough and asked the representatives to let him know their views.

Representatives asked for the proportion of cases which go to the Ombudsman or Judicial Review. Simon said that no Judicial Review cases had gone to full hearing. He said that he did not know how many cases had gone to the Ombudsman but said that he will forward this information to the representatives.

Representatives asked what lessons the Adjudicator’s Office learned from the Ombudsman. Simon said that the Adjudicator’s Office had to work within the parameters set down by HMRC, whereas the Ombudsman does not have these constraints. He said that the Adjudicator’s Office had changed their approach to the consideration of hardship as the result of an Ombudsman’s finding.

8. Minutes of the meeting on 15 January 2008

HMRC said that the minutes of the meeting held on 15 January had been issued to those who attended the meeting for their comments. They asked for any further comments on these minutes by 28 March.

9. Any other business

HMRC said that the tax credits system will not be available from 4 April to 7 April inclusive as there is to be a planned upgrade. They said that the helpline will be available, and advisers will make a note of any calls and will update the system when it is available.

Representatives asked if Paul Gerrard will attend a future Consultation Group meeting to talk about the Tax Credits Transformation Programme. HMRC said that they will discuss this request with Paul as it may be more beneficial for all if he meets representatives bilaterally. They said that they will inform representatives of the outcome.

Representatives said that the information on the website about migrant workers is different to the information HMRC have recently sent to them. HMRC said that the fact sheet that they sent out recently is correct. The website has not yet been updated, but this will happen shortly.

Representatives asked that where HMRC provide an answer to an individual case they provide a note to all representatives around the general point at issue. HMRC said that they aim to develop a template on which generic issues can be recorded. Representatives agreed to this.

Representatives asked whether a copy of the representatives’ action log could be circulated with the draft minutes in future with updates from HMRC.

Representatives asked if they could have a note about what each of the Customer Service Support Groups do. HMRC agreed to provide this.

Representatives asked if Tax Credit Office will be involved in the Saver’s Gateway. HMRC said that this will be a passporting issue.

Representatives asked about Departmental Strategic Objectives and maintaining / improving take-up of tax credits. HMRC said that there is a commitment to maintain take-up of Child Benefit and Child Tax Credit, and to increase take-up of Working Tax Credit, especially for those without children.

Representatives asked if outsourced providers with JobCentre Plus contracts also operate fast track. HMRC explained that they are looking to clarify this with JC+ colleagues.

Representatives asked when they could expect to have a meeting around Residence Order cases. HMRC said that they are considering the representatives request and who might be best-placed to take it forward.

Nigel told the group that Chris Fox is shortly to move to a new job. He thanked her for her input to the Consultation Group.

The next meeting will be on Wednesday 14 May in Somerset House, London.

Post meeting note: HMRC have written to representatives explaining that they are unable to hold the meeting on 14 May following changes in who will attend future meetings from HMRC. The next meeting will be on Thursday 26 June in Somerset House, London.