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Tax Credit case summary 3
Mr C and Ms D completed their claim for CTC and WTC in October 2002. The claim form asked for details of their income in the 2001/2002 tax year, which they duly supplied.
Ms D received an award notice from the TCO shortly after the start of the 2003/2004 tax year, the first in which the 'new' tax credits were payable. It showed the couple's joint annual income, the number of qualifying children and their annual CTC award.
Ms D wrote to the TCO because she believed that the award should be higher because she had reduced her working hours. She gave details of her expected salary for the 2003/2004 tax year and explained that Mr C's income was unchanged.
When the TCO processed the couple's change in circumstances, they correctly entered Ms D's revised income but failed to enter Mr C's income details at all. They issued a revised award notice to Ms D, showing the same information regarding the qualifying children together with details of her new income. Mr C's income, however, was not shown on the award, which had increased by over 1000% because it was based solely on Ms D's earnings.
Ms D said that she did not realise that the award was wrong until she received a copy of 'Tax Credit Update' in the post, which contained a 'ready- reckoner' to help claimants to calculate their correct entitlement. Ms D alerted the TCO to her overpayment in November 2003, by which time she had already received too much tax credit.
In this case, the TCO said that it was not reasonable for Ms D to have believed that the award was correct, as it had not shown Mr C's income details. They did, however, acknowledge that Mr C and Ms D suffered worry and distress as a result of their failure to include Mr C's earnings in their calculation of the couple's award. They agreed to make a payment of £150, in accordance with the Inland Revenue's Code of Practice 1 (COP1) Putting things right. They also acknowledged that they failed to handle the couple's complaints properly and paid them a further £75. The couple remained dissatisfied and contacted this office.
We did not uphold this complaint.
Ms D told us that she believed that the Inland Revenue should waive the overpayment of tax credits. While we accepted that the TCO's omission of Mr C's earnings from their calculation was a regrettable oversight, with serious repercussions for the couple, we agreed with the Inland Revenue's view that it was not reasonable for Ms D to have believed that her award was correct. We also felt that the compensation already paid by the Inland Revenue in this regard was, in the circumstances, reasonable.
We concluded that it was not unreasonable for the Inland Revenue to expect Mr C and Ms D to have checked the award notice and realise that their total income was wrong. The fact that the award had increased by such a significant amount and that it now showed that Ms D was also entitled to WTC should also have alerted her to the problem.
Unfortunately, our investigation was delayed by the TCO's delays in sending us their report and files. They offered to pay Ms D £30 to recognise this delay, which, again, we considered to be reasonable.
Following the conclusion of our investigation, Ms D wrote to us again. She said that, after she had received the second, incorrect, award notice, she had telephoned the Tax Credit Helpline. Ms D claimed that an adviser told her that the award was correct.
In many instances, the Inland Revenue's Contact Centres record the telephone calls that they receive. In this case, they were unable to trace the call and, faced with a version of events where there was no independent evidence to support the claim, we were unable to alter our decision.
