iztax credits from 2005-2007

my client has a letter dated Dec 2023, from hmrc saying his tax cr were not finalised in 2005/6/7 and asking him to confirm the details of income etc, I am worried that he does not have the details and if he disputes it it could turn into amess, he has a some overpayments but the hmrc letter sasy most of these will not be recovered, client is on UC now so I am worried how any tax credit overpayments will impact his UC
it seem unfair that hmrc can chase up folks for information from 20yeasr ago !!!!!!!!!!!!!!!!!!

Dear Diogenes,

This does not sound right.

If the clients has claimed TC in 2004, then a Section 17 Notice would have been issued in roughly April to June 2005 requiring them to supply evidence of their actual earned income in 2004. If they do not do this, then a Section 18 decision will be issued terminating the whole award for 2004/2005. It is treated as though they had never validly claimed. If they did positively respond to the Section 17 Notice, then a Section 18 confirmation of entitlement decision is issued for 2004/2005. This is also the renewal award decision granting TC entitlement for 2005/2006 on an assumed income figure (using the 2004/2005 income figure as its basis). The same will be true for 2006/2007 award as well.

If the client was paid TC in 2005, then a Section 18 (i.e. a finalised decision) had to have been made. The same is true for the following 2 tax years you refer to. I would challenge HMRC to explain how TC awards were made without valid Section 18 decisions being issued.

The HMRC answer may provide some explanation as t how an award could occur without a Section 18 decision but I cannot think how this would occur.

Good luck

Chris