Award notices were issued and customer was asked to check the details on them and informed TCO if any of the information was incorrect. The deadline for correcting information for tax years 2004-5, 2005-6 and 2006-7 has now passed and the tax credit awards have already been finalised. Final decision notices were issued and according to Tax Credit Office the law does not allow for these to be changed. Customer is not suggesting that they attempted at any time to correct the inaccuracies in the notifications.
We have asked whether the awards could be revised under section 20 (4) of the Tax Credit Act 2002. We have sent copies of tax calculations issued to customer from HMRC showing that his income was lower than that mentioned in the TC notifications. The Tax Credit Office state that customer will have to appeal against the income that has been used to calculate the award rather than disputing the overpayment and if customer is not happy with their response she can ask the adjudicator to look into the complaint.
We are not sure what to do. Surely too late to appeal? Not sure that they are correct that the law does not allow final decision notices to be changed. We are considering just complaining to the adjudicator. Has anyone any thoughts?

I probably haven't got my brain in gear, but I don't understand what is going on here. You say:

"The Tax Credit Office state that customer will have to appeal against the income that has been used to calculate the award rather than disputing the overpayment"

but surely if the actual income was less than the figure used in calculating TCs there will be an underpayment of TC and not an overpayment?

I assume the final decisions were issued quite a time ago (they certainly should have been!). If so, I agree it is too late to appeal.

If there is in fact an overpayment of TC then - so far as I know - there is no time limit on raising a dispute. If this has not been done and you have grounds for considering that the overpayment should not be recovered then it may well be worth raising a dispute - you would probably need to do so before the Adjudicator would consider the case anyway.

A section 18 decision is normally carved in stone, subject to prescribed exceptions . The options to change it are largely as follows:

s19 - if HMRC chooses to start an 'Enquiry' under compliance rules, but this can only concern the previous tax year.

s20 - on 'Discovery', but this I think requires the claimant to have been naughty (fraud or neglect), leading to a an error

s21 - Official error. This under used facility is a method of putting right underpayments going back up to 6 years, but requires an official error, which means something uncontaminated by claimant action/inaction. Can be ventilated at a tribunal because it affects entitlement. How are we going to show that claimant should have paid better attention to subsequent award notices etc? Were there extenuating circumstances? Mental Health issues? (note the HMRC Debt and Banking Manual and more recent HMRC publications promise a positive approach to people with mental health problems).

If none of these apply, i think there are difficulties disturbing a s18 decision.

Steve

i'm with derek - confused..

Apologies for anything that was unclear, it is an unusual scenario. I hope this clarifies things.
Firstly the heading was too long

TC overpayment for tax years 2004-5, 2005-6 and 2006-7 where actual income was less than that mentioned on the final award notice/annual declarations.

Yes notifications were issued on time, there is no dispute regarding this and yes potentially there is an underpayment rather than an overpayment. Customer's partner's income was actually about £8,800 whereas they confirmed that it was £16,000. The overpayment occurred as income appeared to have increased.

We have gone through the dispute procedure and complained. Tax Credit Office advised that they can only reconsider things if they are provided with new and relevant information. We have provided details of partner's tax calculations as provided to him by HMRC and asked them to accept that this is new information as it is highly pertinent. They have refused. We are the stage of complaining to the adjudicator.

In their most recent reply they state;
"You are asking us to revise the decision under Section 20 (4) of the tax credit act 2002, unfortunately you will have to appeal against the income we have used to calculate the award rather than disputing against the overpayment

If you are not happy with our response, you can ask the Adjudicator to look into your complaint. The adjudicator acts as a fair and unbiased referee whose recommendations are independent."

I accept what is said about decisions being set in stone. We are looking at section 20 on the basis of customer's neglect i.e. in not actually correcting the errors in the notifications when they were issued. This would be the basis of our complaint to the adjudicator. We have argued that, had HMRC discovered that income was actually higher, they would, as you say, have reconsidered these awards on discovery. They seem to refuse to do so when it is apparent that the income was lower.

I'm still confused! If client did not send in annual dec., payments should have stopped summer 05. So I must assume client did do ann.dec. but gave an incorrect - and too high - figure. What's more, from what you say it appears they did this 3 years running! If this is the case, then (being devil's advocate) one might argue it is the client's own fault they now have this problem!

On the other hand, I quite understand how you regard this as customer neglect, but have no idea whether TCO or Adjudicator will look at the regs. in that way.

But you talk about customer not correcting errors in notifications, which implies the errors were not incorrrect figures given by client but TCO errors which client failed to pick up. If that is the case then I don't see why TCO are refusing to budge.

It seems that, if you have already been through dispute procedure, going to Adjud. is the only option, but I have been told by Adjud's office that they see their role as checking that TCO have correctly applied TCOs own rules . So you may end up having to go to Parl. Ombudsman.