Toolkit

Reference materials: Tax credits 'Inside track'

Disputes, overpayments and underpayments

Subject Access Requests: The data protection unit were based in Newcastle and dealt with all HMRC requests. This unit has now disbanded and from early August 2009, the Tax Credit Office have dealt with their requests. All requests should now be sent to the following address:

Subject Access Request Team, Floor 1 Area E, St Marks House, Stanley Street, Preston, Lancashire PR1 4AT.
[Victoria Todd, LITRG, response 25 August 2009]

New intermediaries dispute and complaint team: A new team called the 'Intermediary Dispute and Complaint Team' (IDCT) has been set up. Post relating to disputes and complaints from voluntary sector agencies will be identified and forwarded to this team. All items of correspondence should be acknowledged within 5 days and provide details of the team handling the correspondence as well as the manager’s name and contact number. Cases will be dealt with in case order, and if a response cannot be provided within 15 working days for complaints, or 30 working days for explanations or disputes, then an interim response will be sent. This interim response will identify the allocated caseworker. If any updates are needed, contact can be made directly with the caseworker involved.

[TCCG, response 10th August 2009]

Specialist Team for advisers: Representatives have repeatedly informed and shown HMRC examples of poor quality correspondence around dispute and complaint cases. This is particularly a problem for complex cases. HMRC have agreed that there have been times they have not met the correct standards. In light of that there is a proposal from HMRC that a new specialist team will be set up to deal with all disputes and complaints received from advisers so that more complex cases get a response at the right level. The aim is for this team to commence from 1st April, and further work with representatives will take place to establish the role of this team.

[TCCG, response 5th March 2009]

Contact telephone numbers: HMRC confirmed that all dispute/complaint letters should contain a direct contact number and not just the main helpline number.

[Victoria Todd, LITRG, response 4th December 2008 (Operational group meeting)]

Evidence of telephone calls: Representatives queried HMRC practice when a telephone call that a claimant states they have made is crucial to an overpayment dispute. HMRC confirmed that TCO guidance states where a claimant raises that a phone call was made, the calls should be requested.

[TCCG, response 4th December 2008 (Operational group meeting)

Application of COP 26: HMRC sent the following statement to representatives regarding the application of COP 26 for disputes:

'In-line with our general approach to customer service, will always look again at tax credit overpayment decisions when customers dispute them, as is set-out in COP26. Until now, as is outlined in COP26, we have also been prepared to review that decision again when customers ask us to and when new information is provided. Exceptionally, we have also been prepared to review decisions again where no new evidence was provided, but where there was good reason to suppose that the first review may have not have been fully considered.
However, given the increasing stability of the whole tax credit system and the increasing quality of work being generated in the Tax Credit Office from 'Lean' working methods, we are now enforcing more routinely the principles of COP26. This means that, where an initial review has been considered under the revised COP26 rules since February 2008, we will no longer carry out a second review of a decision to recover an overpayment unless a customer produces new evidence that was not available when the first review took place.
Of course, we will still look at each request for a review we receive and, if there is good reason to believe that the first review was of insufficient quality, it will be reviewed.'
[TCCG, response 28 August 2008]

Targets: Representatives asked HMRC what targets they worked to for dealing with dispute and complaint correspondence. HMRC stated that Tax credits correspondence is included in the general HMRC target to process 80% of correspondence in 15 days, and 95% in 40 days. In 2006, the then Paymaster General set HMRC a target to reach a turnaround time for dealing with disputed overpayments in 4 weeks. That target was being met but, again, the administrative error had a significant impact.

[Beth Lakhani, CPAG, response 30 May 2008]

Application of new COP 26: Representatives asked for details of when the new COP 26 (31 Jan 2008 version) would apply for dispute cases. HMRC stated that Where a customer asks for a pre-January 2008 disputed overpayment decision to be re-considered, the department will look to see whether the overpayment occurred because the 'reasonable belief' test was applied in a way which, in hindsight, was unfair or inconsistent.

[Siobhan Harding, Citizens Advice NI, response 13 March 2008]

Telephone recordings: Representatives asked HMRC to confirm the current situation regarding the recording of telephone calls made to the helpline. HMRC confirmed that all calls to the helpline should now be recorded; it would only be if there were unforeseen problems with the recording or retrieval equipment that difficulties may occur.

[John Andrews, LITRG, response 6 March 2008]

Merger of teams: Representatives asked HMRC for more information regarding the merger of the dispute and complaint teams:

‘TCO are still in the pilot phase of this merger, but plan to start to roll out the new merged arrangements across the business from January 2008 to bring together a number of processes currently carried out by different teams. It will be August 2008 before all teams are working the new processes. During the transition period some customers with disputed overpayments and complaints will still be handled by different teams, depending on where we are in the roll out timetable. With the rollout of the new arrangements, staff will give their direct dial number on all letters they send to the customer about a disputed overpayment or in response to a complaint. One of the main aims of merging the two areas is to provide a better service to the customer and reduce rework on overpayments in Debt. We believe this can be addressed in part by adopting more of a 'caseworker' approach currently in operation within the complaints team in the Customer Support Unit.'
[Victoria Todd, LITRG, response 20 December 2007]

Suspension of overpayments: Representatives raised at the May TCCG meeting a request for confirmation of when recovery would be suspended. In light of the poor quality responses received from the dispute team, representatives argued that suspension should continue during the complaints procedure. HMRC confirmed via email on 20th September 2007 that suspension will only apply -

on receipt of an initial dispute;
on receipt of an appeal;
where a customer provides new information about the overpayment, in response to a decision on an initial dispute, and asks us to review the position further;
following a referral from the Adjudicator's or Ombudsman's offices where the complaint relates to an overpayment and provides further/new information about the overpayment which was not in the initial dispute. Issue ongoing. Representatives again raised the suspension of overpayment collection whilst complaints are ongoing at the November TCCG. HMRC are taking this away to consider.
[Victoria Todd, LITRG response 20 September 2007]

IB JSA & CB JSA confusion: Representatives informed HMRC of the confusion caused by the two types of DWP benefits which has in some cases caused large overpayments. HMRC said that they will see what they might be able to do to make things clearer when they next review the claim form, guidance note and check list. In the meantime they state that the helpline scripts direct advisers to find out what type of JSA the claimant is specifically receiving.

[Lucy Cochrane, Citizens Advice, response 16 August 2007]

Format for disputes: DMB informed us that they had been given guidance to inform claimants (and advisers) that disputes against overpayments would only be accepted on form TC846. The TCCG have now confirmed that disputes can be sent either on form TC846 or by letter. Whilst they encourage the use of the TC846 ('as it can help them focus on the type of information we need them to provide') a letter with the relevant information will suffice.

[Victoria Todd, LITRG, response 6 March 2007]

Suspension of overpayments: Representatives queried when overpayments will be suspended. TCCG confirmed that suspension of recovery action will occur when a TC846 or letter disputing the overpayment is received from the claimant. In addition it was confirmed that the overpayment is released for collection once a decision on the dispute has been made. Recovery will not be automatically re-suspended if the claimant subsequently complains to the Adjudicator's Office. It would only be subsequently suspended if new information was supplied by the claimant.

[Abigail Bremner, CAS, response 16 Feb 2007]

Hardship: Representatives requested information of how advisers should be making hardship requests and commented on the unsuitability of the TC846 to do this. TCCG confirmed that the TC846 is designed for claimants to dispute an overpayment which is distinct from hardship requests. The following information was provided to us:

'Claimants with an adjustment to their ongoing award - If a claimant is experiencing financial hardship as a result of recovery of an overpayment then, as stated in CoP26, the claimant or their adviser should phone the Helpline. If a claimant is experiencing hardship because of an in-year adjustment, a Helpline adviser can arrange for the recovery rate to be adjusted, depending on the level of award. If, after the reduction of the recovery rate, the claimant is still, exceptionally, experiencing hardship they should write to the TCO who will consider the position with colleagues from Debt Management and Banking (DMB). The overpayment will be recovered at a maximum of 10/25% in line with CoP26 (depending on the level of their award) whilst the hardship request is considered.

Direct Recovery - If a claimant, or a CAB adviser acting on their behalf, states that they are suffering hardship, this is sufficient for DMB to stop recovery action until the circumstances have been discussed. The claimant or their adviser need to provide income and expenditure information, together with any other relevant information. No further recovery action will be taken until the matter is resolved.'
[Abigail Bremner, CAS, response 16 Feb 2007]