Tax Credits: Claims changing

Once a claim has been processed and an initial award made it can be changed several times both during the tax year and after tax year ends.

Changes during a tax year

There are many changes that must be notified to HMRC within 1 month. A full list of these changes can be found in the changes of circumstances section.

Any change made to a claim during a tax year has to be made using either Section 15 or 16 Tax Credit Act 2002. These decisions carry a right of appeal.

More information about how these changes are made can be found in the Tax Credit Technical Manual on the HMRC website.

Changes during the renewal period

Once the tax year has ended, HMRC guidance to staff states that if a change is reported before the claimant has completed the renewals process and that change is one that does not increase the maximum rate, the change cannot be implemented until after the renewals process is complete. The change will therefore be implemented when the final decision for that year is issued following renewals. Further information can be found here.

Changes that affect the maximum rate, which are reported during the renewals period, will result in a ‘statement like an award notice’ (SLAN) being issued along with a provisional award notice including details of any up-rating.

Changes after final decision

Once a final, conclusive decision has been issued (under Section 18 Tax Credit Act 2002) it can only be amended in very limited circumstances even if it is incorrect.

The situations when a final decision can be revised include:

On 25th July 2007, the Financial Secretary to the Treasury announced that HMRC had identified an administrative problem with a number of older tax credits claims and that over 160,000 cases would have to be reviewed. The cause of this error was that HMRC had revised many final decisions without using any of the routes listed above. Although these new decisions may have accurately reflected the claimant’s circumstances, there was no legal basis for making the changes. As a result HMRC reviewed the cases. Any overpayments that arose as a result were remitted and going forward HMRC appear to have implemented operational procedures to ensure that final decisions cannot be revised unless one of the exceptions above can be applied.

Last reviewed/updated 25 August 2017