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Forum Home  →  Discussion  →  Income support, JSA and tax credits  →  Thread

Tax credit award/review notices TC602(A)

Pete at CAB
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When HMRC list dependent children on an award letter to they also say whether they get DLA or not or just that they get the disabled/severely disabled child element. I haven’t seen one of these for a while so I cant actually remember. We’ve had two cases lately where the SDCE has not been included and in both cases the parents concerned have said that they didn’t realise because the award notice and notes were so obscure

Charles
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I’ve attached the relevant parts of a TC602 for a case where the child was severely disabled, and for a case where they were not severely disabled.

I think the TC602 may not be so relevant. For non-finalised awards, HMRC will revise. It’s only for previous years which have been finalised where you’d have a problem. For that, HMRC rely on the information in the renewal pack to say the claimant contributed to the error. See [2015] UKUT 345 AAC.

We currently have a case in front of the FtT where we are arguing that the UT case should not apply where the error is between being entitled to HR DLA or LR/MR.

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Pete at CAB
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Thank you Charles, much appreciated- I think that in both cases the cl. has materially contributed by failing to properly read or check the relevant notices

Daphne
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Charles
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Unfortunately those regs only apply in cases where the claimant notified HMRC of the DLA award within one month of being notified of the DLA award.

Charles
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Pete at CAB - 13 January 2021 09:56 AM

Thank you Charles, much appreciated- I think that in both cases the cl. has materially contributed by failing to properly read or check the relevant notices

I don’t know the facts in your particular cases, but I think there is a strong argument that it is very difficult for a claimant to tell whether the HR DLA is reflected in the award notice. Remember, the claimant does not have the benefit of seeing the wording the award should have stated. They will only see the wording used for someone only entitled to LR/MR DLA, and that does not specify which rate of DLA they are receiving. It is therefore highly likely they would believe all is in order.

Mark Willis
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Hi Pete at CAB

This may not help legally but I think they are morally obliged to pay up since the “correction exercise” as announced in the Autumn statement 2016 policy costings p.33 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/571402/Policy_Costings_AS_2016_web_final.pdf ) which revealed the informaton should be shared automatically:

“A higher level of Child Tax Credit (CTC) is awarded to families with disabled children for whom Disability Living Allowance (DLA) is paid. It is the customer’s responsibility to inform HMRC that they receive DLA for their child. However it is HMRC’s practice to take data from Department for Work and Pensions (DWP) about such children and update the customer’s CTC awards automatically. There was a gap in the data-feed between DWP and HMRC during 2011-14 and because of this around 28,000 families in 2016-17 are not receiving the higher level of CTC which reflects their receipt of DLA. This measure will be an in-year adjustment to pay the higher level of Child Tax Credit (CTC) to these families for this financial year, from 6 April 2016. Payments will continue in future years for as long as the families remain eligible.”

The attached document (from HMRC to Consulation Group 18/12/18 but unhelpfully no date or source shown on letter) says the exercise was extended to cover a change in rate of DLA.
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Mark

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Charles
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Mark Willis - 13 January 2021 04:18 PM

Hi Pete at CAB

This may not help legally but I think they are morally obliged to pay up since the “correction exercise” as announced in the Autumn statement 2016 policy costings p.33 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/571402/Policy_Costings_AS_2016_web_final.pdf ) which revealed the informaton should be shared automatically:

“A higher level of Child Tax Credit (CTC) is awarded to families with disabled children for whom Disability Living Allowance (DLA) is paid. It is the customer’s responsibility to inform HMRC that they receive DLA for their child. However it is HMRC’s practice to take data from Department for Work and Pensions (DWP) about such children and update the customer’s CTC awards automatically. There was a gap in the data-feed between DWP and HMRC during 2011-14 and because of this around 28,000 families in 2016-17 are not receiving the higher level of CTC which reflects their receipt of DLA. This measure will be an in-year adjustment to pay the higher level of Child Tax Credit (CTC) to these families for this financial year, from 6 April 2016. Payments will continue in future years for as long as the families remain eligible.”

The attached document (from HMRC to Consulation Group 18/12/18 but unhelpfully no date or source shown on letter) says the exercise was extended to cover a change in rate of DLA.
Cheers
Mark

HMRC only apply that to non-finalised awards. They say there is no legal power to revise earlier awards (no official error due to the UT decision I mentioned earlier in the thread).
We are currently attempting to appeal one case trying to distinguish between the UT case and a case where the error was only in the rate of DLA, as that is far harder to tell from the renewal paperwork.

Pete at CAB
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Thanks again, is this ongoing appeal with the UT , if so we may be able to get any appeal from our cl stayed until your appeal is decided

Mark Willis
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PS Thanks Charles. A successful appeal on this specific point would be very helpful for others. I think if HMRC kept to the spirit of the autumn 2016 statement it could correct these finalised awards if it wanted to, either by opening an enquiry within one year, or using the discovery power within 5 years, or an extra-statutory payment. We have had cases where they have agreed to pay eventually.
Mark

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Pete at CAB - 14 January 2021 09:24 AM

Thanks again, is this ongoing appeal with the UT , if so we may be able to get any appeal from our cl stayed until your appeal is decided

No, we’re still waiting for a hearing at FtT.

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Mark Willis - 14 January 2021 12:35 PM

PS Thanks Charles. A successful appeal on this specific point would be very helpful for others. I think if HMRC kept to the spirit of the autumn 2016 statement it could correct these finalised awards if it wanted to, either by opening an enquiry within one year, or using the discovery power within 5 years, or an extra-statutory payment. We have had cases where they have agreed to pay eventually.
Mark

We had quite a bit of correspondence back and forth with HMRC, and they simply aren’t agreeing to pay up. That is why we are appealing. Do you have any suggestions how we can get them to correct the awards or make an extra-statutory payment?

In our case, the error stretches back to 2014, and the Autumn 2016 statement was explicit in that it only covers 2016 onwards, so we would probably continue with our appeal either way (although official error won’t get us all the way back either, it will go further than April 2016).

Mark Willis
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Yes, we have had the same problems with pre-2016 cases. They eventually agreed to pay up in one case from 2016 onwards only after the adviser went to Adjudication Officer, MP and Parliamentary Ombudsman. For moral support, this House of Lords debate https://hansard.parliament.uk/Lords/2016-11-30/debates/A062D1B6-BB61-4725-847E-11CE8C13FC7B/DisabledChildrenTaxCredit  :

•      Lord Young of Cookham (Con): “All I can say is that, if I were still in another place and one of those 28,000 families came to see me at my advice bureau, and I knew there was a legal problem, my advice to them would be to refer the matter to the Parliamentary Ombudsman.”

•      Baroness McIntosh of Pickering (Con): “This is just the type of case that any Back-Bench MP could present to the ombudsman, and I hope the Treasury—my noble friend has certainly shown himself to be a man of honour—will abide by the ruling of the ombudsman in such a case.”

Stuart
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Slightly different issue here but may be of help - new regs in draft form were approved in the Commons this week (although not yet in force) - (rightsnet summary of them here) - to enable review of finalised awards where disability claims take several years to come through - not helpful for older cases although HM Treasury has been asked to clarify how many losers have missed out in the six years it’s taken to amend revision rules - could be useful to support arguments here in compensation claims nevertheless.

Charles
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Mark Willis - 14 January 2021 04:45 PM

Yes, we have had the same problems with pre-2016 cases. They eventually agreed to pay up in one case from 2016 onwards only after the adviser went to Adjudication Officer, MP and Parliamentary Ombudsman. For moral support, this House of Lords debate https://hansard.parliament.uk/Lords/2016-11-30/debates/A062D1B6-BB61-4725-847E-11CE8C13FC7B/DisabledChildrenTaxCredit  :

•      Lord Young of Cookham (Con): “All I can say is that, if I were still in another place and one of those 28,000 families came to see me at my advice bureau, and I knew there was a legal problem, my advice to them would be to refer the matter to the Parliamentary Ombudsman.”

•      Baroness McIntosh of Pickering (Con): “This is just the type of case that any Back-Bench MP could present to the ombudsman, and I hope the Treasury—my noble friend has certainly shown himself to be a man of honour—will abide by the ruling of the ombudsman in such a case.”

Thanks for this, that’s very helpful.