CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.   Tax credits project  Tax credits factsheets Training courses FREE tax credits training for Local Authorities Publications Online services Donate Join CPAG CPAG home Contact us          This project is funded by the Scottish Government	CPAG in Scotland Tax Credits E-Bulletin June 2010 Dear Colleague, Welcome to the June 2010 edition of CPAG in Scotland's tax credits e-bulletin keeping you up-to-date with tax credits news and developments. Contents CPAG in Scotland news and events        - Tax credits training  Tax credits news             - Emergency Budget announcement on tax credits          - New guidance on tax credits and residence rules          - Overpayments: notional entitlement         CPAG in Scotland news and events Tax credits training  Tax credits – appeals, overpayments and complaints 16 September 2010, Glasgow (10am - 4pm) This course aims to help advisers understand how overpayments can arise and how to challenge decisions. It is suitable for experienced advisers as well as those with little experience of tax credits. The course looks at: The law on decisions, revisions and appeals How to appeal Recovery of overpayments, including recent changes regarding single/couple status Challenging overpayments Making a complaint Future changes to the income disregard, as announced in the June Budget Level Standard     Tutor Mark Willis SNS   3.5 and 4.3  CPD   5 hours Course fee: £93 for CABx, £108 for voluntary, colleges and housing associations and £153 for statutory. To book a place click here  or contact us on 0141 552 3303.   Tax credits news Emergency Budget announcement on tax credits The Chancellor, George Osborne, announced several changes to the tax credits system in the Budget on 22 June. Note that none of the following changes are coming into effect in the current financial year, so this year’s training information and leaflets on the CPAG in Scotland website remain current. The changes include: From April 2011: the baby element (£545 a year) will be removed from child tax credit (CTC) the second income threshold for the family element (£545 a year) of CTC will reduce from £50,000 to £40,000 the first and second withdrawal rates for tax credits will increase to 41% (from 39% and 6.67% respectively) the child element of CTC (£2,300 a year) will increase by £150 above CPI indexation (note that all benefits and credits are to be uprated in line with the Consumer Prices Index rather than the Retail Prices Index)  the level of in-year rises of income that will be disregarded from calculations of tax credit entitlement will decrease from £25,000 to £10,000 people aged over 60 will qualify for working tax credit (WTC) if they work at least 16 hours a week, rather than 30 as currently, as announced in March 2010 Budget From April 2012: the family element of CTC will be withdrawn immediately after the child element (removing the second income threshold of £40,000) the child element of CTC will increase by £60 above CPI indexation the period for which a tax credit claim and certain changes of circumstances can be backdated will be reduced from three months to one month the 50 plus element will be removed from WTC a disregard of £2,500 will be introduced in the tax credits system for in-year falls in income (so tax credits will not be increased for the first £2,500 of a fall in income) the Government will not introduce the £4 supplement in the CTC for each child aged one and two, as announced in March 2010 Budget From April 2013: the level of in-year rises of income that will be disregarded from calculations of tax credit entitlement will decrease further from £10,000 to £5,000 The full budget documents are available on the Treasury website. Changes to tax credits can be found in Chapter 2. New guidance on tax credits and residence rules The Revenue has produced extensive new guidance on tax credits and residence rules for migrant workers in its Claimant Compliance Manual. This manual is used when claims are being investigated as part of an examination or enquiry, but the same rules should apply to all claims. The new section explains the Revenue’s interpretation of European law for child tax credit (CTC) and working tax credit (WTC) when the claimant is a European Economic Area (EEA) national in the UK and has children and or partner in another EEA state: The claimant is in the UK, has children and a partner living or working in the EEA or Switzerland. This would be a joint claim for CTC based on the household i.e. UK + Other Member State income. However the claimant would need to make a single claim for WTC based on UK income alone. (CCM 20090) Migrant Workers: Lone Parent Element: This is an additional element of WTC payable where there is a single WTC claim and the customer is responsible for at least 1 child. To be responsible for a child for WTC, the child must normally live with the worker. If the child is living in another EEA country you will need to consider whether the child normally lives with them. (CCM20240) In cases where children, children/partner being claimed for is living in another EEA country, WTC is paid under domestic legislation and CTC is paid under EU legislation. This means there needs to be two separate awards and the claim must be worked manually. (CCM20300) An appeal to the Upper Tribunal on some of these points may be worthwhile to obtain the interpretation of an independent Judge. The new section of the Claimant Compliance Manual can be viewed here. Overpayments: notional entitlement The Revenue has revealed how it deals with notional entitlement. This is where overpayments have occurred because the claimant took more than three months to report a change in single or couple status. The overpayment can be reduced by the amount the claimant would have been entitled to if s/he had reported the change promptly. The Revenue’s guidance manuals have not yet been updated to reflect the position from 18 January 2010, as reported in the December 2009 e-bulletin. However, the Revenue has allowed us to see the guidance note issued to Helpline staff, which includes the following points: The claimant does not need to dispute the overpayment for notional entitlement to be considered. In cases where the claimant has taken more than three months to report the change in single/couple status, s/he should be told about notional entitlement – it should not be left up to the claimant to request it. The offset will be considered by a special notional entitlement team and will take up to four weeks. If you wish to unsubscribe from all our welfare rights e-bulletins click here. If this e-bulletin has been forwarded to you and you wish to subscribe to it click here. We would welcome feedback on the e-bulletin, please contact us at acarr@cpagscotland.org.uk with your comments. Thank you. ^ back to top Child Poverty Action Group is a charity registered in England and Wales (registration number 294841) and in Scotland (registration number SC039339). Company limited by guarantee registered in England (registration number 1993854).Registered office: 94 White Lion Street, London N1 9PF. VAT no. 690 8081 17.