Page last updated at 13:27 GMT, Friday, 4 December 2009

Call for more tax credits clarity

Tax credits were first seen in the UK in April 2003

Some people are missing out on backdated working tax credit payments to which they are entitled, according to a campaign group.

The issue specifically affects claimants without children who had been in work before their claim, the Low Incomes Tax Reform Group (LITRG) said.

Other people automatically have their claims backdated by up to three months before the authorities receive claims.

Tax credits, introduced in 2003, are aimed to help the low-paid in work.

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The group believes that thousands of people could be missing out on tax credits to a value of up to £500, because they do not qualify for the automatic backdating regime.

When circumstances are not clear, then a customer would have to ask for their tax credit award to be backdated
HMRC spokeswoman

It has also accused HM Revenue and Customs, which administers the scheme, of failing to inform these people that they had a right to claim backdated tax credits.

"Instead, HMRC are paying working tax credits only from the date the claim form is received at their office, meaning that these claimants may miss out on up to three months of tax credits," said John Andrews, chairman of LITRG.

"It is clear to us that HMRC owe many tax credit claimants a lot of money for backdating payments not made. It is not acceptable to continue with this policy of not telling people of their entitlements."

He called for a review of working tax credit claims where no backdating took place, for a more prominent and clear explanation of the process on the claim form, and for the rules to be outlined on leaflets and websites.


A spokeswoman for the HMRC said that it was important for people to report changes of circumstances or claim promptly.

"HMRC will backdate a tax credit claim as a matter of course when they are certain about the circumstances. If, for example, a customer belatedly reports the birth of a child and provides the date of birth, then HMRC will backdate the claim automatically," she said.

"However, when circumstances are not clear, then a customer would have to ask for their tax credit award to be backdated, in order for HMRC to ensure it is accurate.

"We are currently amending our literature, so customers know what they need to do to receive the award they are entitled to."

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