Many claimants seeking tax credits may miss out on up to £500 of their entitlements, because the Revenue (HMRC) is failing to make them aware of their full entitlements.
While backdating of tax claims is automatic for people with children, there is no automatic backdating of tax credit claims for people with no children, who were in work prior to submitting a claim – even though they are entitled to backdate for up to three months, according to the Low Incomes Tax Reform Group (LITRG).
For these claimants, backdating tax is available only if they apply for it – and they are most likely unaware of this fact.
Latest figures show that there were half a million claimants in this category on 1st April 2009. However, claimants are not made aware of their right to backdate, the LITRG said.
Tax credit law states that a claim ‘shall be treated as made’ (i.e. may be backdated) for up to 93 days before it is received by HMRC. However, no mention of the right to backdate is included in tax credit forms and documentation, says the LITRG.
The tax credit claims form and the accompanying TC600 information notes make no mention of the right to backdate. Neither, says the LITRG, do the Revenue’s tax credit leaflets WTC 1 and the more detailed WTC 2.
“Firstly, it is clear to us that HRMC owe many tax credit claimants a lot of money for backdating payments not made; secondly it is not acceptable to continue with this policy of not telling people of their entitlements,†says the LITRG in its statement.
