what does a tax credit mandatory recon look like?
i have rarely had any tax credit appeals (thankfully) but i currently have a case where the client has asked for a mandatory recon of overpayment decisions.
the letter they have got in response doesnt say mandatory recon notice in the way the DWP letters tend to and instead says “thank you for contacting us about your tax credit overpayment..”
am i likely to get a bounce back if we appeal with this?
I had a few of these back in the day. The experience typically was to submit a WTC/AP form to lodge a mandatory reconsideration and HMRC to treat is as if it as a complaint (under COP26). HMRC are in control of how complaints are dealt with and there is no argument that the overpayment is recoverable, unless they say that it is not. This was very common and not many appeals got lodged. I think it was about 2006 (and maybe later) before I worked out what was happening.
I would usually complain about the failure to follow the legislation and insist that a proper MR decision be issued and there would then be delays and complaints before a proper MR decision was issued. I would highlight on the SSCS 5 that the 1-month time limit to lodge an appeal did not start until the proper formal decision was issued, so no problem getting the appeal admitted. In an overpayment case, recovery of the overpayment was suspended whilst the MR or complaint was pursued, so no harm done to the client.
In those cases that were urgent because client’s tax credit entitlements had been affected or terminated, I attached a copy of the MR application form to the HMRC response letter and highlighted that the HMRC letter was a decision (unfavourable, of course) in response to the MR application and, according to the legislation, the client secured a right of appeal, even if the HMRC response was not in the correct format. The appeals always seemed to be admitted.
I had a couple of appeals in which HMRC subsequently argued that there was no right of appeal because no MR decision had been issued and they applied to strike it out. The Tribunal Judges rejected their application, deciding that we were correct in stating that right of appeal existed and the cases both proceeded to hearings. In another appeal, they issued a new MR decision letter and I sent it to HMCTS with an application to amend the grounds of appeal and the Judge allowed that, so it also proceeded to a hearing.
It does depend on the SSCSA official or District Judge who initially deals with whether to admit the application. Some see the word “overpayment” and automatically decide that there is no right of appeal against a tax credit overpayment. So you may have to identify that your MR under Section 21 Tax Credits Act 2002 was against a Section 14, 15, 17 or 18 decision and not an issue dealt with by Sections 28-30.
It’s been a while since I did a Tax Credits appeal, so I hope this history is still accurate and relevant to the situation you are in.
Good Luck and stay safe.
According to this handy guide https://www.gov.uk/hmrc-internal-manuals/tax-credits-manual/tcm0316020
a mandatory reconsideration notice should be coded TC1170.
But some of the others would also appear to be a notification of the outcome of a review under TCA section 21A, being wary of HMRC’s tendency to mix up disputes about recovery with mandatory reconsiderations, as noted by Chris.
thanks both. really helpful,