I have a client who is a Bulgarian National who came to the UK on a visa in February 2005 and was self employed. She had one child already. Another baby was born in April 2006 and she no longer undertook any self employed work. She is married to an Albanian National who is in the UK on a visa with"no recourse to public funds" and is working 40 hours a week and earning in the region of £23800 a year at the moment and was working for part of 2006/07 tax year. They were advised to try and claim tax credits and did so successfully from 7/11/2006 getting both WTC and CTC at this point. When they completed their annual declaration form this year they have had a letter back to say that they are no longer entitled and that they have to pay back all the money since 2006 that they have been paid.

Client is expecting another baby in September and is very distressed. Tax Credits Helpline told us that they had failed the "residency test" and directed us to another number for more information which turned out to be an alternative Child Benefit line and they were unable to help.

I am going round in circles a bit as to whether they are entitled or not. Did she lose the right to reside when self employment activity stopped? Are they entitled as a couple as he is working and is a family member of an EU national? Can she claim as economically inactive but self sufficient as can support themselves without Income Support etc. or am I barking up the wrong tree.

I will advise her to request that they do not recover and quote COP if all else fails but would welcome some help with above. Thanks

Trying to get my head round this one.

Husband must be here on a work permit with a "no recourse" condition. Did they come in as a couple or meet and marry here? I think it must be the latter if she came in pre Bulgaria joining EU on a separate visa, since there is no separate visa needed for the spouse of a work permit holder who has the right to work secondarily.

Presumably then when she became an A2 national the same sort of rules applied as to A8 nationals, ie she could be self-employed but is she wanted to work she needed a work permit of her own - or does she, granted the status of spouse of a work permit holder?

So anyway, she is an EU citizen now, but is she a qualified person? As I read article 7 of 2004/38, you are a qualified person if you are an EU national who has sufficient resources not to become a burden on the social assistance scheme - and I think HMRC would be horrified at the idea that child tax credit is social assistance - or the spouse of such an EU national. I'm not 100% clear what the rules would be if technically it is the non-EU spouse who is the one with the resources, but hang it all, the tax credits system is enough of a benefit to aggregate resources anyway.

Why don't these people read the text books and keep their lives simple?!

And what does HMRC mean by the residence requirements?

Thanks for that. I guess HMRC mean the right to reside test but they were not very forthcoming on the helpline and the clients haven't had any information to explain, just new final decision letters for 2006/07 and 2007/08 . We will try and find out more. All they said was that they had been looking at their case for some time so presumably they couldn't decide either.

I will also clarify with her the exact circumstances of how they met. Most of the appointment time we had was spent trying to get some sense out of HMRC and basic details so we have booked a further one.

Will try various tactics and see what happens. The people I see never seem to have simple lives or fit in to the rules in the books very easily. Still makes life interesting.

I think the issue here may be that your client and her partner were both subject to immigration control prior to Bulgaria joining EU on 01.01.07, so prior to that date they cannot take advantage of the tax redit rule to allow the claim if one partner is subject to no recourse rule but other isn't. I don't understand how they got tax credits in this situation.

Since 01.01.07 your client can take advantage of the rule, but needs RTR - as an A2 national she would have this by being self employed - not required to register for authorised employment- problem is if she is no longer self employed, would need another R2R and this could be tricky.If she had not been self employed or employed for one year I think she would now have to apply for work authorisation.

Depending on your client's circumstances best advice may be to become self employed again if possible, but this won't help on recovery of the TC overpayment.

I think that they applied at start of February 2007 but the claim was backdated 3 months to 7/11/2006. HMRC did this automatically. Client has said that they provided all the documantary evidence including passports that were requested of them at the time and they sent the award letter.

It would appear that this may be HMRC's error but don't have all the information yet.

Thanks to those who offered advice on this. We appealed against the decision on self sufficiency grounds in that husband is employed and earns more than IS/JSA threshold (£300 net a week). Had a letter from HMRC that states that failed residency marker has been lifted and the award is now back in payment and there should be no gaps in the award. No real explanation but client happy and we are keeping our fingers crossed that this is the end of it.