Tax Credits - Notice to pay but no overpayment decision

Hi all

I deal with Tax Credits so rarely so apologies in advance for what is probably a very basic question…

My client has been issued with a Notice to Pay, which appears to relate to 21/22.

Client received a final TC decision (TC602) for 21/22 less than a month prior showing a full entitlement and no indication of an overpayment. Looking at the overpayment figure (which correlates directly to the amount of CTC they received in 22/23), I suspect the Notice to Pay is actually referring to current tax year and reference to 21/22 is a typo.

Client is no longer entitled to Tax Credits (child is now 20 so no longer meets basic conditions of entitlement).

Am I right in thinking that if this is an in year overpayment that a revised Tax Credit decision should still have been issued on form TC602?

Phone call to HMRC this morning confirms no correspondence has been issued other than the Notice to Pay. Surely it can’t be right for claimant to receive the Notice to Pay before being given a decision and notified of appeal rights?

Hi Tom
Hard to tell what HMRC has done here, but I think you are right that there should have been a revised award notice for 2022/23 with appeal rights before the notice to pay.
I just wonder if this occurred over the renewal period and the claimant was receiving provisional payments pending renewal, but then did not renew due to child turning 20? This would mean there is technically no award for 2022/23 and all the provisional payments are overpaid. A late declaration with good cause would allow the award to be renewed for 2022/23 up to date of 20th birthday - which hopefully would reduce overpayment? Apologies if you’ve looked into that already, just guesswork from me really.
Mark

I suspect the Notice to Pay is actually referring to current tax year and reference to 21/22 is a typo.

A passing note on this, just in case. I recall being confused by tax credits saying something like “6/4/22 entitlement = nil”. If they are wiping out the award for 22/23 then HMRC seemingly show that by concertina-ing the award down to the first day of the tax year. They don’t mean that the award which ended in 2022 was nil, they are referring to the one that started in 2022.

Second [edit, First] footnote on page 2 of CTC/982/2017 is perhaps relevant:
https://www.rightsnet.org.uk/?ACT=39&fid=9&aid=1486_uZTvJsIDCM3PVskvwfn2&board_id=1

Jon (CHDCA) - 09 December 2022 11:49 AM

I suspect the Notice to Pay is actually referring to current tax year and reference to 21/22 is a typo.

A passing note on this, just in case. I recall being confused by tax credits saying something like “6/4/22 entitlement = nil”. If they are wiping out the award for 22/23 then HMRC seemingly show that by concertina-ing the award down to the first day of the tax year. They don’t mean that the award which ended in 2022 was nil, they are referring to the one that started in 2022.

Second footnote on page 2 of CTC/982/2017 is perhaps relevant:
https://www.rightsnet.org.uk/?ACT=39&fid=9&aid=1486_uZTvJsIDCM3PVskvwfn2&board_id=1

I was just about to post something similar.

A notice to pay is a Section 29 notice (does it mention Section 29) which can only be issued after a Section 28 notice. https://www.legislation.gov.uk/ukpga/2002/21/section/29

2022/23 won’t be finalised yet unless the person has moved to UC. So if it hasn’t been finalised, there shouldn’t be a s.29 notice as there is no s.28 overpayment.

The only other explanation, as Mark says above, is that this could be a non-renewal and so all provisional payments for 2022/23 are being recovered. There wouldn’t be a final award notice in that case for 2022/23 but usually a statement on account is issued for the amount.

LITRG

Jon - I’m pretty sure you’re spot on so massive thanks for pointing that out.

Mark - thanks for the suggestion. I think this makes complete sense given the sequence of events…

& yes LITRG this is a s29 notice to pay.

If Mark’s suggestion that the claimant did not renew for 22/23 and HMRC are seeking to recover provisional payments - is it then correct that no overpayment decision has to be made/notified and there’s no right of appeal?

I’ll see if I can get more info from the next HMRC operator about the series of events and if this is the case, make a late declaration as you’ve suggested Mark.

Huge thanks to all