Where are we up to with tax credit claimants who separate from partner but are late in notifying TCO of change in circs and submitting single claim. I know the public purse policy has been ditched - are there any other strategies of challenging the overpayment?

As you say, the public purse argument is now of very marginal use. This is namely the 'notional entitlement' possibility when (i) the error is due to a 'genuine mistake' (ii) that took place at the time of the claim, (iii) must involve a relationship change etc, and (iv) must surface as part of a compliance investigation.

Some hopeful souls still try to persuade HMRC to employ the pre-May 2007 version of these 'rules' (much more flexible) in cases that pre-date May 07 although I don't know if this works.

Are the maths behind the overpayment right? May still be in time to challenge the amount through an appeal/late appeal.

Is the client owed historical arrears, that can be rescued via s21 of the Tax Credits Act 2002? (where official error caused the error, and client was unaware etc... can go back 6 years etc). This could offset against the OP.

Failing all that, good luck with the COP 26 based challenge!

Steve

And it is known that Government Ministers are actively considering the currently unsatisfactory situation. I checked within the last month.

But then they have been doing that for over a year.

We live in hopes.

I was about to advise a client whose husband from abroad who had no recourse to public funds came to live with her in June 07 that because she failed in her duties to advise them of this change which must be notified to the Revenue, the overpayment was recoverable. However, I am confused as to the above and a recent example given in a recent CPAG Tax Credit article as to whether she could argue notional capital that as she states, she did not realise she needed to declare him because of his immigration status and genuinely mistakenly claimed as a single person from the outset until her renewal claim in April 08 when she made a joint claim. What caselaw are you following here and where can I find further information.

Many thanks

Biddy

Sorry notional entitlement not capital!

Under the current provisions in the compliance manual - offsetting is allowed where there is a 'genuine error' at the point of claim.

The new provisions start at Section CCM15605. The old provisions (cases opened before 17 May 2007) can be found from CCM 15510 onwards. http://www.hmrc.gov.uk/manuals/ccmmanual/CCM15000.htm

Based on what is in the manual, if the error was made at the point of claim, then offsetting will apply. So if she made a claim as a single person instead of jointly then it would seem to apply.

However the manual states that it excludes cases where the error was made regarding reporting a change of circumstances, so where the original claim was made correctly (as a single person) and there was a failure to report a change in circumstances (partner moving in). http://www.hmrc.gov.uk/manuals/ccmmanual/CCM15610.htm

Of course, the distinction is unfair particularly where two people make the same mistake only at different times (one at the point of claim, the other regarding a change of circs). We have raised this with HMRC.

The second issue of course is that the current offsetting provisions are in the compliance manual and not in the main dispute guidance. However, I would certainly argue that they should be applied to all in the interests of fairness if you can bring your case within the current provisions.

JohnA noted in a previous post that this issue was being considered by Ministers and I know that he chased it up recently and was told it is still under consideration.

Victoria

Wow, very clear, many thanks Victoria.