Minutes of the Tax Credits Consultation Group (TCCG) meeting 30 July 2009

Attendees

HM Revenue & Customs

Fiona Andrew
Tracy Gale (chair)
Irene O’Brien
Cliff Sale
Colin Strudwick
Christina Smyth
Andrew Burland
Sean Griffin
Michael O’Connor
David Skinner
Rachel Varndell
Piran Lynn-Smith

Representatives

Sarah Alcock - Gingerbread
Siobhán Harding - Citizens Advice (Northern Ireland)
Beth Lakhani - Child Poverty Action Group
Katie Lane - Citizens Advice
Victoria Todd - Low Incomes Tax Reform Group
Angela Williams - Institute of Chartered Accountants of England & Wales
Robin Williamson - Low Incomes Tax Reform Group
Fran Robinson - Local Government Association
John Andrews - Low Incomes Tax Reform Group / Social Security Advisory Committee

Apologies

Jane Hayball - Local Government Association
Matthew Lancashire - Citizens Advice Scotland
Frances Robinson - Local Government Association
Maureen Arthur - National Association of Welfare Rights Advisers
David Brodie - TaxAid
Bernie O’Gorman - Local Government Association

1. Welcome

Tracy Gale welcomed everyone to the meeting and explained to the group that HMRC was arranging meeting dates and suitable accommodation for meetings well into 2010. Tracy said that HMRC would let representatives have the details shortly.

2. Update on actions from previous meetings

Andrew Burland apologised that HMRC had not yet circulated the updated list of actions they have been working on from the May meeting. Andrew gave a verbal update on the outstanding points still being worked, and mentioned arrangements were underway to set-up further sub-group meetings which had been agreed and for which representatives had now supplied agenda items. Andrew explained that a full combined list of outstanding action points would be circulated with the minutes of this meeting.

3. Operational update

Irene O’Brien gave an operational update for the Tax Credit Office (TCO) and Child Benefit Office (CBO).

For tax credits:

• There is a Tactical Delivery Plan moving towards October this year with the aim of improving processing times.
• The large amount of work done around renewals this year has been a success, with the number of renewal responses to date being higher than at the same time last year.
• There had been a six-week pilot where 75,000 letters were sent to customers who hadn’t previously renewed a claim to assist them with doing so. It was estimated that for every pound spent on that pilot exercise, ten pounds had been saved in potential overpayments for these customers, so HMRC are planning to take this forward again next year.
• HMRC have more Contact Centre staff answering calls on tax credits renewals, meaning more customer calls can be answered.

Irene mentioned that HMRC would provide a further update on the current renewals exercise later in the year.

Beth Lakhani asked about the processes followed where customers are late in renewing their claims and how people can challenge HMRC where there is doubt around ‘good cause’ for late renewals. Beth also wondered whether the extension to the renewals work next year might cover more customers, for example those with complex circumstances.

Irene O’Brien confirmed that HMRC were looking to extend this successful work next year, but that no further details were available at this stage.

John Andrews mentioned some examples of ‘mystery shopping’ he had carried out around help with tax credits renewals in HMRC Enquiry Centres, the results of which were not ideal. Irene confirmed that she would ask for improvements in this area to be added to the plans for next year.

Katie Lane confirmed that after very late involvement with renewals this year, representatives had been promised earlier involvement in the preparation for next year’s renewals. Katie said that they had received draft copies of renewals notes for comment recently, but that the timescales for responding were quite short given this was a time of year when many people were on leave, etc. Katie felt that it would be useful to meet to discuss and consider any renewals statistics that were available. HMRC said they would look to extend the date by which representatives comments would need to be returned. Irene O’Brien mentioned that HMRC had further information on the current round of tax credit renewals and said that HMRC would look to send this to representatives shortly. Irene and Tracy both confirmed that HMRC would look into setting up a meeting with members in connection with renewals planning for the coming year.

Robin Williamson mentioned issues some agents had raised recently around ’64-8’ authorisation forms in the run-up to the 31 July renewal date, and Helpline staff sometimes refusing to speak to agents.

HMRC confirmed that reminders had been issued to Helpline staff on this in the past week, but said they would check the Helpline renewals guidance with regards to 64-8 forms and dealing with agents.

Victoria Todd mentioned that there appeared still to be a sizeable number of customers who had not yet renewed and who wouldn’t have by the 31 July date, and asked whether payments would be terminated automatically in those instances. Victoria said that she had listened to some calls from last year where HMRC staff were unsure of when claims could be re-instated following termination, and said there is a need for clear guidance around areas such as when ‘good cause’ should be considered.

Irene O’Brien said that from 3 August 2009 on a rolling basis any claims which had not been renewed would be terminated. Irene confirmed that customers have 30 days after the 31 July date during which time their claims could be re-instated, but that customers would have to show good cause for any delay if their responses were received after that period.

John Andrews mentioned the facility for Income Tax customers and some Crown Servants posted overseas to email HMRC to notify certain changes of circumstances. He highlighted that people may think they have met their responsibilities via that route if they weren’t told otherwise. Victoria Todd also mentioned that whilst on-hold waiting to speak to the Tax Credits Helpline yesterday she had heard a message around notifying changes online. HMRC said they would need to check this as these messages did not sound correct.

Irene O’Brien continued to explain the numbers of disputed overpayments on-hand at TCO was currently lower than it had been at any point in the last three years. Representatives contended that this did not appear to reflect their personal experiences, as they felt many disputes were still taking a long time to deal with, and some responses were still unsatisfactory.

Irene mentioned that a lot of effort had been put into staff training and into quality improvement. Additionally, the new team set up in May 2009 to handle complaint and disputes sent via intermediaries had handled a significant amount of work.

Representatives raised concerns that many disputes and complaints did not appear to be acknowledged when they were received at TCO, and that interim or ‘update’ responses were not given. They said that this meant a customer could have recovery of an overpayment suspended sometimes for some months, but without knowing why. Beth Lakhani asked that the information given in the update today be sent to reps alongside details of acknowledgement processes, etc used by the new intermediaries team.

Irene said she would check this situation with the appropriate managers and would ask for the processes involved to be outlined and sent to representatives via the TCCG secretariat. Irene confirmed that this would include details of what acknowledgements or interim updates should be sent, when they should be sent, and whether correspondence from the new intermediaries team would be specifically identifiable.

Tracy Gale confirmed that the manager of the Customer Service Support Group would be invited to the next meeting with representatives in September.

Irene mentioned that the appeals intake for tax credits had been higher than anticipated in recent weeks and said that a recovery plan was in place as a result of this. HMRC said that this would be covered in the forthcoming meeting to be arranged on Appeals.

For Child Benefit:

• Recent performance improvements show that on average between 72 and 75 per cent of all Child Benefit claims were processed within nine days of receipt.
• Additional staff were being deployed to help improve the situation further. HMRC was aware that several representatives had complained that both they and their clients had seen instances where they had been promised a call-back on a claim but had not received one.
• In connection with the smaller percentage of claims which did take longer to deal with, delays had occurred where there are ‘rival’ claims for the same children, and where responses are not always received from the different parties involved. Conflicting information could also cause problems in such instances. Irene said that CBO were looking at the procedures they use in such cases to try to improve things.
• Work was also ongoing to look at delays on claims where information is needed from the authorities in other EU member states. Andrew Burland confirmed that he would send a list of instances where this type of contact was necessary to Katie Lane from Citizens Advice Bureau (CAB).

Siobhán Harding said she welcomed the news Irene had given about the additional staff, as she had escalated some examples recently where call-backs had been arranged but not received. Siobhán had also seen cases where there were long delays and the Tax Credits Consultation Group (TCCG) secretariat were taking these forward on her behalf.

Turning back to tax credits, Victoria Todd asked about instances where changes in circumstances had been reported but couldn’t be processed immediately by the Helpline and needed to be referred to TCO. Victoria asked whether customers could expect any overpayments resulting from any associated delays to be automatically written-off. Beth Lakhani made the point that larger families with higher awards were likely to be more adversely affected with higher overpayments which can result even where changes are processed within 30 days.

Tracy Gale confirmed that David Skinner from her team would look into this.

4. Historic tax credit debt

Colin Strudwick explained he was from the Operational Policy team that had been created in April 2009, and said that the team was undertaking a review of ‘historic’/old tax credit debt. Colin explained that this work had various strands, but primarily HMRC were looking at which debts could be remitted or written-off where it would not be value for money to collect them. Colin said that HMRC would not contact customers as part of this exercise, unless discussions were already ongoing with them about their debt.

Appropriate categories of these ‘older’ debts would be identified and remitted. Colin said that Debt Management within HMRC is planning a tax credits ‘Debt Campaign’ this autumn, including more pro-active processes, so HMRC were expecting that there would not be such a build-up of debt in the future.

Beth Lakhani mentioned that HMRC could appear to be treating ‘family-element’ only customers with relatively smaller debts more favourably in this way. Colin explained that it was wrong to assume that the debts identified were only from relatively smaller awards of tax credits. Katie Lane said that claimants in the early years did not have the level of support given to new claimants during this year’s renewals, so there is more reason to remit older debts. She also said that the fact that only older debts being recovered by Debt Management were being considered for remission meant there was inequity between claimants who still have the same household composition (whose debts are in cross-recovery) and those who had separated since then (whose debt would be subject to recovery by Debt Management and potentially qualifying for remission). Tracy Gale mentioned that both HMRC and the Financial Secretary to the Treasury recognised representatives’ position around older tax credit debts.

John Andrews asked whether the action taken by HMRC Debt Management to write-off debts in the categories identified would apply equally ‘across the board’ for all areas of HMRC. Colin Strudwick explained that this exercise was specifically looking at tax credit debt, but said that ‘value for money’ principles apply in all areas of HMRC.

Tracy Gale asked Colin to follow this point about ‘value for money’ in correspondence and requested that representatives are given details of the categories under which certain debts were being remitted.

5. Method of payment

Cliff Sale introduced the work his team has been taking forward to try to reduce the number of costly cashcheque payments being made, in favour of paying tax credits by the cheaper and more secure account transfer method. Cliff’s presentation outlined the reasons for and aims of this work and he said that HMRC would circulate an electronic copy of the presentation after the meeting. Cliff mentioned that HMRC were aware that many customers who receive cashcheques go on to pay them into an account, and so HMRC’s aim is to avoid sending cashcheques and pay directly into a customer’s account, where possible. Cliff mentioned that the Post Office Card Account (POCA) system had been extended now until 2015, and these accounts are available to virtually all customers who want one.

Christina Smyth explained that HMRC’s aim was to hold one or two smaller sub-group meetings with representatives who wanted to discuss the difficulties customers may have in dealing with accounts, and so may still need cashcheques. Christina asked representatives to email Cliff directly once they receive the electronic version of the presentation if they wanted to be involved in any such meetings.

Victoria Todd commented that some of the tax credit customers who were currently receiving payments by cashcheque from HMRC would prefer for their payments to be made directly into an account, but couldn’t because of problems with HMRC systems.

Christina Smyth explained that her team were also planning to have some sessions with such customers, and so HMRC also hoped to cover these types of issues there.

6. Child Benefit Claim Form re-write for 2010

Piran Lynn-Smith handed out paper copies of a draft version of the proposed new Child Benefit claim form and notes for 2010. Piran said that research in the past year around certain forms had shown that error rates on the current Child Benefit form were higher than expected. Piran said that ICD had held ‘customer immersion’ sessions on the back of these results to refine prototypes, and was working in partnership with the Change Team in Benefits and Credits, processing and Contact Centre colleagues to create a new simpler product set for 2010. Piran explained that HMRC would be grateful for representatives’ feedback on the draft form and notes, and said that electronic copies would be circulated to representatives for their comments by mid September via the Consultation Group secretariat email address. He said that the form had been reduced from twelve to eight pages, had less than half the number of boxes for customers to complete, and will undergo large scale in-home testing with 400 customers in August.

7. Notional entitlement

David Skinner explained that the Financial Secretary to the Treasury had written to a number of representatives recently on the issue of notional entitlement following earlier meetings on the issue. David said that HMRC were planning to hold working party meetings with certain representatives probably in September or October 2009 using the Financial Secretary’s letter as a ‘term of reference’ for these meetings.

Beth Lakhani mentioned that they had welcomed the Financial Secretary’s reply, and said that Child Poverty Action Group want to take part in the working group meetings, but said that they would reserve the right to seek changes via other legal channels.

Tracy Gale explained that the aim of this was to work together to develop the policy collectively, and said that the Financial Secretary recognised that this wouldn’t affect any group’s ability to lobby or challenge any decision via the usual channels.

Beth mentioned a specific scenario where customers may have notified the Department for Work and Pensions (DWP) of a change in their circumstances, but had failed to let HMRC know, and asked whether HMRC may be able to remit any resulting overpayment to the date the customer contacted DWP.

HMRC said they would look at this as part of the group’s considerations.

8. Any other business

John Andrews said that he had written to the Secretariat recently with an email around the need for full consultation on new products such as the leaflet’s being used by HMRC at Children’s Centres, which he said still need to include an example around notifying changes for those going overseas. John asked that the points he raised be recorded from today’s meeting and that HMRC respond, hopefully to agree that the six points he has raised could form part of a standard procedure.

[Post-meeting note: The six requested points taken from John’s email are:

1. Whenever a tax credits/child benefit leaflet/form is being proposed by HMRC that the TCCG is notified and the rationale for its production explained.
2. When the first draft of such a leaflet/form has been produced it should be circulated to the TCCG for comment.
3. Officials will then respond to indicate what comments had been taken on board and those not and the reasons if not.
4. All leaflets should include help for those with a range of disabilities.
5. All leaflets should be listed and available for download on HMRC’s tax credits leaflet’s section of the Internet.
6. All leaflets should be available from the HMRC orderline (unless explained otherwise) and appropriate leaflets will be stocked in Enquiry Centres.]

Tracy Gale explained that she had not yet had sight of the John’s email, but thanked John for raising this issue, and said that HMRC would consider the points he had raised.

David Skinner said that the Financial Secretary had asked HMRC to consult with representatives on the issue of whether tax credit appeals should be heard within the ‘Social Entitlement’ or ‘Tax’ chamber. David said that this issue would therefore be listed for discussion at the forthcoming meeting on Appeals.

As time was running short at this meeting, David explained that HMRC would send representatives details of the ‘dual recovery’ and ’50/50’ split processes which were due to come into force shortly by correspondence.

Victoria Todd mentioned that some HMRC manuals already appear to have these instructions in place, and said that representatives had notified advisers and customers of this as a result.

David Skinner said that his team would consider this with Debt Management colleagues within HMRC, to ensure that the new instructions were considered systematically from the appropriate dates.

Fran Robinson mentioned that Local Government representatives had received some laminated information sheets From the Department for Children, Schools and Families which included ’ready-reckoner’ details.

Tracy Gale said that the agreement was that these should only contain ‘general’ information. Fran said that they are in the process of ‘quality-checking’ the details, and said she would send the information to Victoria Todd and to HMRC.

HMRC confirmed that they are hoping to include a general update on Children’s Centre work on the agenda for the September Consultation Group meeting.

Victoria Todd said that representatives have comments on the latest draft of the Debt Management Guidance which had been circulated recently by HMRC, and said that guidance around hardship had been omitted and examples around when customers should appeal or dispute didn’t appear to be correct. David Skinner said he would contact Victoria the following day to discuss and resolve these issues.

Victoria asked that the issues they had raised around Backdating for tax credit customers be put on the agenda for the next meeting of the Group in September. Andrew Burland said HMRC intended to have Backdating as an agenda item if possible.

Beth Lakhani asked whether HMRC could circulate a copy of the paper on Compliance prepared in part by Fran Bennett of Oxford University. HMRC said that they would look into this with Fran.

The next meeting will be in September. Further details will be sent to the representatives.