TC claim terminated due to application for tax-free childcare
I have someone who was receiving significant tax credits, but started an application for tax-free childcare. He then realised that he would be significantly worse off and did not follow through with it.
However, his TC claim was stopped because he had made a declaration of eligibility for the TFC scheme. He requested an MR and received a decision notice against which he appealed.
The HMRC submission now states that they were wrong to do the MR because the decision was taken under s.30 Childcare Payments Act, which is not a decision that carries a right of appeal under s.56 of the same act or under any other enactment.
On the face of it, they appear to be right, but I’m wondering if anyone has a different opinion.
This is very important for my client as he can’t claim UC at all due to capital, so he is substantially worse off.
We are dealing with a few such cases at the moment. I believe they are correct about the fact that the termination decision is not appealable (it’s not even technically a decision at all). The award notice subsequently issued is the same as any other s16 decision, which is normally appealable, but in this case isn’t, because it’s not made during the period of the award. However, when the annual review is done, and your client receives the final decision under s18, that will be appealable. However, it does mean you’ll have to wait some time before getting the appeal heard.
Two of our cases have had a s18 decision, so we are appealing them, but have not had a hearing date set yet.
A further option would be to attempt to make a fresh claim for tax credits. I (and others, including the LITRG) believe there is a loophole in the legislation which allows this. We have managed to get the Tribunal to agree to hear appeals against HMRC’s refusal to take a fresh claim in four such cases.[ Edited: 12 Feb 2020 at 01:39 pm by Charles ]
Thanks for that Charles. I had wondered about the possibility of appealing the final decision and we can definitely try that.
Are you able to explain (or direct me to information about) the fresh claim loophole you refer to?
The relevant legislation stopping people making claims for tax credits is Art. 2 of the No. 32 Commencement Order and either Art. 6(1) of the No. 21 Commencement Order or Art. 7(1) of the No. 23 Commencement Order.
The No. 32 Order has a saving “where the claimant or claimants who makes or make the claim for the award had an award of the same type of tax credit for the previous tax year to the tax year for which the award is made” (Art. 3(5)(c)).
The No. 21 and No. 23 Orders have an exception “where a person ... had ... an award of child tax credit or working tax credit in respect of a tax year and that person ... makes ... a claim for that tax credit for the next tax year” (Art. 6(5) No. 21 Order and Art. 7(6) No. 23 Order).
These savings/exceptions were included to allow renewal claims, however, they appear to include cases like yours too.
Thanks very much for that. So does that mean he can (arguably) make a claim now because his last claim included an award for the previous tax year, or does he need to wait until the next tax year?
He could do it now.
What we’ve done is attempt to make the claim by phone, which gets refused, as no SDP. We then send in a letter detailing the attempt to make a claim, and ask them to reconsider that and to please reply in writing. When they reply in writing (which sometimes takes a bit of pushing), we then appeal, using their letter as proof that the decision has been looked at again.
We’ve managed to get the Tribunal to accept jurisdiction in all our cases so far based on that. We haven’t had any hearings yet though.
I don’t think my client has anything to lose by trying all options. That’s all really helpful, thank you.
Interesting UT case -  UKUT 239 (AAC) - which finds that article 7(6) of the 23 Order does not apply where the claim in one tax year is made by a couple but then the claim for the next year is made by a single person - in this case the partner had died and the remaining claimant wanted to make a new claim.
But that to me implies that if it is the same person (or persons) making the claim in the next tax year then they would be able to claim so hopefully works for your client allanr.