Finalising the tax credit award

By Tolley

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Finalising the tax credit award
  • Income disregard
  • Impact on current award in payment

When a claim is subject to the renewals process, the claim and amount awarded is finalised, and if necessary, adjusted according to the actual income of the year of claim.

The initial award put into payment is based on the income of the previous year, or sometimes on an estimate for the current year. This enables a provisional award to be made. See the Making and renewing a tax credits claim guidance note.

TCA 2002, s 7

When the renewal and annual declaration are completed and submitted, the award actually paid is finalised. It is only after this, and the issue of the final award notice, that an enquiry can be opened for a particular year. See the Compliance issues for tax credits guidance note.

It is normal for the actual income of an award year to differ from the previous year’s income used in making the provisional award. At this point, the award made for the previous year is adjusted as follows:

    More on Tax credits: