Tax Credits: Appealable decisions
This section sets out the tax credits decisions that can be reviewed under the mandatory reconsideration process and then appealed. You can find out how to start an appeal in the appeals section of the site.
Rights of appeal are granted by statute against (TCA 2002, s 38(1)):
- An initial decision on a claim for tax credit (s 14(1));
- A revised decision on reporting a change of circumstances (s 15(1));
- Any other revised in-year decision altering or terminating an award (s 16(1));
- An end-of-year decision leading to a final award (s 18(1) for reply-required cases or (6) for auto-renewal cases);
- A decision following an enquiry (s 19(3));
- The continuation of an enquiry (appellant may ask for a direction that HMRC must give a closure notice – s 19(9), (10);
- A decision on a discovery (s 20(1) – revision of income tax liability, or s 20(4) – fraud or neglect of claimant or representative);
- A decision correcting an official error under regulations made under s 21;
- The determination of a penalty by HMRC (Sch 2, para 1); and
- A decision to charge interest on an overpayment (s 37(1)).
There is no right of appeal against an administrative decision in relation to the recovery of an overpayment, nor against the issue of a notice under s 14(2), 15(2) or 16(3).
Note also procedure for settling an appeal under Taxes Management Act 1970 s 54 applies to tax credit appeals.
One noticeable absence from the list above is a right of appeal against a decision by HMRC to recover an overpayment. Using the appeal rights above, a claimant can challenge a decision by HMRC that led to an overpayment and, if successful, that decision can be reversed establishing that there is in fact no overpayment (or it is less than the original amount).
However, if there is in fact an overpayment (the claimant has received more than their entitlement), there is no right of appeal against HMRC’s decision to recover this overpayment.
An appeal can only be brought against any of the above decisions after it has been reviewed by HMRC under the mandatory reconsideration process.
Updated 7 July 2016