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DMBM555800 | Debt and return pursuit: tax credits: dual recovery cases

From HM Revenue & Customs · Debt Management and Banking Manual

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Background

In April 2008 Benefits & Credits gave a commitment to the Financial Secretary to the Treasury and to intermediaries to suspend direct recovery where a customer has both:

  • a tax credits overpayment in direct recovery with Debt Management

  • another debt being recovered at 10%, 25% or 50% through the customer’s ongoing tax credit award.

There will not be a publicity campaign around this. People will find out through the intermediaries such as Citizens Advice Bureau and Tax Aid and we expect word will then spread. This is to support the aim of reducing poverty and the financial burden on families.

Debt Management (DM), the Tax Credit Office (TCO), and Contact Centres (CCs) will:

  • check for 10%, 25% or 50% cross year recovery and direct recovery

  • send an email to DL-TCOU BLACKPOOL-DUAL RECOVERY (now managed by B & C). if criteria applies, for further checks

  • add the following note on NTC and (except for TCO, CCs and ECs) on IDMS

‘Case under review for dual recovery. Do not take any direct recovery action until review completed.’

If the customer does not meet the criteria continue with business as usual guidance.

B&C will now review these cases and notify DMB of cases where it is appropriate to withhold and, where appropriate, resume recovery action.

Action to take

On receipt of notification from B&C that recovery action should be withheld on a case

  • cancel any existing Direct Debits set up to collect the debt in question

  • update IDMS notes accordingly

  • change next action to Clerical Review

  • B/F the case for 12 months and

  • ensure HH & Work Item are in 328500 on C/W Tax Credit role.

On receipt of notification from B&C that recovery action should resume on a case

  • make one attempt to contact the customer, by telephone, to arrange payment/agree TTP.

If successful in contacting the customer

  • take appropriate recovery action by following BAU process

If unsuccessful in contacting the customer

  • issue appropriate letter

  • update IDMS &

  • B/F 14 days.

Guidance

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