Tax Credits: Navigating HMRC
HMRC is a large organisation and often goes through periods of re-structuring and re-organisation to match changing business and customer needs. Here we explain the functions of different parts of HMRC in relation to tax credits.
Her Majesty’s Revenue and Customs (HMRC)
HMRC is a non-ministerial government department which means that they do not operate under the day-to-day control of a government minister. The Queen appoints Commissioners who have the responsibility for the administration of the Department. The Commissioners are responsible for delivering the objectives established by the Chancellor, this includes the administration of the tax credits system. HMRC publish an organisational chart that shows board members and their responsibilities.
Pre 2018 – Benefits and Credits
Prior to November 2016, HMRC was structured around four operational groups, each led by a Director General. B&C was one of those operational groups and was led by Nick Lodge (Director General).
B&C was the part of HMRC that is responsible for tax credits, child benefit, guardian’s allowance and tax-free childcare.
In November 2016, HMRC underwent a reorganisation. Benefits and credits was split up with tax credit strategy and policy moving to sit under the Director General Customer Strategy and Tax Design and the operational side of tax credits moving under the Director General Customer Services.
Tax-free childcare and Universal Credit have moved under the responsibility of Director General of Transformation.
For many years, the part of HMRC which dealt with most of the operational aspects of tax credits was called the Tax Credit Office (TCO) but, whilst that term is still often referred to, the Tax Credit Office no longer exists as a formal and distinct operational part of HMRC. Instead, tax credits administration and telephone handling are managed across HMRC operational streams rather than in a standalone Directorate.
The Benefits and Credits (B&C) operational business stream in HMRC's Customer Services Directorate is responsible for many of the operational parts of the tax credits system and back office processes. The B&C process claims, carry out compliance checks, deal with disputes, appeals and complaints, amongst other things.
Generally, the B&C are a ‘back office’ which means that they don’t generally interact with claimants in the same way that advisers on the tax credits helpline do. Normally, contact with B&C operations is with a specific HMRC worker about a specific issue, such as an appeal or a compliance investigation.
HMRC’s tax credits helpline advisers send referrals to B&C operations for issues that they cannot immediately deal with such as backdating and notional offsetting requests.
Debt Management (DM)
DM is the part of HMRC responsible for collecting debt owed to the department. This includes tax credits debt as well as normal tax debt. Tax credits overpayments start out with the operations side of tax credits but after an initial attempt at recovery the debts are passed to DM who then sometimes use private third party companies. In some cases, DM transfer old tax credit debts to DWP for collection, where the debt has been outstanding for a while and there are no repayment arrangements in place,
HMRC have a network of contact centres that deal with telephone calls from claimants. Often referred to as the tax credit helpline (0345 300 3900 or NGT text relay: dial 18001 then 0345 300 3900), it is actually a group of contact centres spread across the UK who deal with calls to the main helpline number. The tax credit helpline works very closely with the back office tax credit teams.
The tax credit helpline escalate cases to the B&C operations back office if they cannot deal with a particular issue.
HMRC Enquiry Centres (EC)
HMRC have closed their offices across the country that were referred to as enquiry centres. HMRC can still provide limited face to face advice or home visits where appropriate and only by appointment, for those identified as needing extra support (using HMRC criteria) in their dealings with HMRC. This is through the Extra Support Team (EST) (previously Needs Enhanced Support) See contacting HMRC about tax credits for more information.
Last reviewed/updated 2 August 2021