Tax Credits: Backdating
In certain circumstances tax credits claims can be backdated. This section of the website provides information about when claims can be backdated as well as links to HMRC guidance about the backdating process.
The information below was written by the Low Incomes Tax Reform Group.
- Standard backdating
- Backdating more than 31 days/1 month
- How to claim backdating
- Restrictions on backdating
- Backdating tax credits - interaction with Universal Credit
- More information about backdating
An initial claim can be backdated if the circumstances entitling the person to tax credits have subsisted for the period of the backdating. But a claim may generally only be backdated by a maximum of 31 days. Prior to 6 April 2012, the backdating period was 93 days.
Changes of circumstances can be backdated up to 1 month. Prior to 6 April 2012, the backdating period for changes of circumstances was 3 months.
There are two situations in which it is possible to get backdating of more than 31days/1 month:
If a person has claimed asylum as a refugee and is then awarded refugee status or they have been granted leave to remain in the UK by the Secretary of State having been relocated to the UK pursuant to arrangements made by the Secretary of State under section 67 of the Immigration Act 2016 then, providing they apply for tax credits within one month of receiving notification of that refugee status or s67 leave, they will be treated as if they made their tax credits claim from the original date they claimed asylum. Prior to 6 April 2012, refugees had 3 months from being awarded refugee status to inform HMRC and receive longer backdating.
Faizah claimed asylum as a refugee on 12th May 2008 and was granted refugee status on 10th April 2012. She applies for tax credits on 8th May 2012 (within one month). The claim for tax credits is treated as being made on the date she claimed asylum (12th May 2008).
Zabia claimed asylum as a refugee on 28th September 2008 and was granted refugee status on 10th April 2012. She applies for tax credits on 29th May 2012 (more than one month after notification of her refugee status). Her tax credits are backdated by only 31 days from the date she applied.
It is important to note that any backdated amount due will be reduced by any support received under the Immigration and Asylum Act 1999 (such as NASS payments) unless any DWP backdating has already been reduced to take these payments into account.
Backdating is also possible by more than 31 days/1 month where entitlement to one of the disability elements is dependent upon an award of a qualifying benefit. The rules for backdating disability elements changed on 6 April 2009.
Prior to 6 April 2009, when applying for tax credits, HMRC asked claimants to attach a letter to the claim form if they had applied for one of the qualifying benefits but had not yet received a decision. Providing they then notified HMRC within 93 days of the award of that qualifying benefit, backdating should have been given to the date from which the disability benefit was awarded or from the date of claim whichever was the later.
If there was an ongoing tax credits award, the claimant had to notify HMRC both when they applied for the qualifying benefit and then again within 3 months of it being awarded in order to receive backdating of more than 3 months.
From 6 April 2009, providing the claimant notifies HMRC within 1 month (3 months prior to 6 April 2012) of being awarded the qualifying benefit, they will receive full backdating. There is no need to tell HMRC when they apply for the disability benefit.
Similarly, if their claim for tax credits is dependent on the qualifying benefit, providing they claim within 31 days (93 days prior to 6 April 2012) of being awarded the benefit they can receive full backdating.
Example of the rules (since 6 April 2009)
If Sandra applies for Disability Living Allowance for Amy in April 2012, and it is not awarded until October 2012, providing Sandra tells HMRC of the award of DLA within 1 month she will receive backdating of the disability element to April 2012.
She is not required to tell HMRC in April 2012 when she applies for DLA.
Most awards of working tax credit (WTC) and child tax credit (CTC) are backdated automatically. CTC claims are normally backdated to the date of birth of the child, or by 31 days, whichever gives the shorter period.
If the claimant is returning to work after leaving benefits and claiming WTC, then it is likely that you will receive automatic backdating. However, those who are claiming WTC for the first time will not receive automatic backdating and must request it.
It is good practice that to check that an award has been backdated as expected and contact HMRC if the award start date has not picked up either the automatic backdating or the claimant’s backdating request.
There is currently nowhere on the claim form to ask for this backdating. The claimant should attach a letter to their claim form requesting backdating. Alternatively, they should contact the helpline and ask them for the backdating. They should refer the request to the backdating team in the Tax Credit Office. If this does not happen, the claimant should ask to make a complaint and should submit an appeal against their first award notice. The appeal should explain why they think the award should have started on an earlier date.
In the past, HMRC have not explained to claimants that they may be entitled to backdating or how to claim it. This was particularly a problem for WTC only claimants who may have missed out on up to 3 months of backdating. HMRC have amended the claim form notes and other materials for the 2011-2012 and subsequent tax years, however there are no plans to go back and give backdating to those who may have missed out. HMRC have confirmed that they will give backdating in those cases where a claimant missed out and makes a request for it. Under statute, the absolute time limit for doing so is five years from the date of the decision (under Section 21 Tax Credit Act 2002 using the official error process, although in some cases where the decision is dated in the last 13 months it may be possible to use the appeal route. Outside of this time limit, it may be possible to argue for compensation if the claimant missed out on backdating due to HMRC wrong information.
Claimants receiving support from HMRC's Tax-Free Childcare scheme cannot also receive tax credit for the same period. The rules, found in SI 669/2015, mean that backdating of tax credits will be restricted to prevent tax credits being backdated to cover a period where the claimant (or either claimant) has previously been in receipt of or made a declaration of eligibility for tax-free childcare payments. See our tax-free childcare section for more information about the scheme.
There is one exception to this restriction on backdating tax credits to a period where a claimant had made a declaration of eligibility for TFC. Where no payments were made out of the childcare account by the claimant or their partner and the account has been closed, backdating of a tax credit claim can be allowed by up to 31 days even if this coincides with a period for which there was a declaration of eligibility for TFC. This is because some tax credit claimants have accidentally claimed TFC which has automatically terminated their tax credit award and so they have been required to make a new claim for tax credits. This prevents them from being disadvantaged providing there is a gap of no more than 31 days between the two claims.
The basic rule is that a UC claimant cannot claim tax credits (and other legacy benefits), although there are some exceptions.
This means where the person is classed as a UC claimant, they can't claim tax credits even where the prospective fresh tax credit claim would start from a date, or cover a period, before the start of the UC claim. In other words, where that tax credit claim would be backdated to or 'treated as made on' a date before they were a UC claimant, the tax credit claim is not allowed once they are classed as a UC claimant. This applies to claimants who are looking for backdating because they have been granted refugee status (or indefinite leave to remain under s67 - 'Windrush' claimants - and to claimants who experience a delay in DWP awarding them a qualifying disability benefit where they work 16 hours a week and less than 30 hours a week so they can't claim WTC until the qualifying benefit is awarded.
For tax credits, the exceptions to this rule cover situations relating to renewals.
Where the person is not a UC claimant but they live in a UC full service area, they can't make a claim for tax credits if they would be entitled to claim UC. This does suggest there is a question over whether a person, who is not entitled to UC, can submit a backdated claim for tax credits.
The following information about backdating is contained in the HMRC manuals online:
- Contents (Tax Credits Manual)
- Backdating for Refugees
- Backdating due to the disability elements
- Eligibility due to the disability elements
- Evidence of an earlier claim (particularly useful for lost claim forms)
Last reviewed/updated 11 October 2018