Corporate report

2019 to 2020 annual report from the Commissioners for Revenue and Customs to the Treasury on tax credits

Published 15 March 2021

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This publication is available at https://www.gov.uk/government/publications/annual-tax-credits-report-2019-to-2020/2019-to-2020-annual-report-from-the-commissioners-for-revenue-and-customs-to-the-treasury-on-tax-credits

Presented to Parliament pursuant to Section 40(2) of the Tax Credits Act 2002

Report required under section 40 of the Tax Credits Act 2002

Section 40(1) of the Tax Credits Act 2002 (as amended by the Commissioners for Revenue and Customs Act 2005) requires the Commissioners for Revenue and Customs to make to the Treasury an annual report about:

  • the number of awards of each tax credit made in the year
  • the number of enquiries conducted under section 19
  • the number of penalties imposed
  • the number of prosecutions and convictions for offences connected with tax credits

Section 40(2) requires the Treasury to publish the annual Report and lay a copy before both Houses of Parliament.

The table below shows:

a) the number of awards of tax credits.

b) this is based on information processed by 2 April 2020. Not all information for 2019 to 2020 is yet finalised at the time of production of this report. The average number of recipients in the year, based on this final information, is planned for publication by July 2021. The figures quoted in this report were published in HMRC’s Child and Working Tax Credits (WTC) statistics in July 2020 and relate to provisional awards as at 2 April 2020.

The figures include out of work families with children receiving Child Tax Credit (CTC), but does not include families receiving ‘family support’ through the benefits administered by the Department for Work and Pensions (i.e. Universal Credit, Income Support, and income based Jobseekers Allowance).

c) number of enquiries conducted under section 19.

Section 19 of the Tax Credits Act 2002 allows the Board to carry out enquiries into awards after the end of the year, once they have been finalised. There were 15,368 enquiries conducted in 2019 to 2020. In the previous year (2018 to 2019) there were 13,572 enquiries.

d) number of penalties imposed.

In 2019 to 2020 there were 3,314 cases where a penalty was imposed for tax credit related offences. This compares with 11,793 cases in 2018 to 2019. HMRC collects data on the number of individual penalties imposed: for 2019 to 2020 there were 3,516 individual penalties, compared with 12,766 in 2018 to 2019. Where a case or award is a joint or household claim, two penalty notices can be given, split equally between the couple (individual penalties).

e) number of prosecutions and convictions for offences connected with tax credits.

For serious offences, HMRC continues to adopt a policy of selective prosecutions and publicises the results. There were 94 prosecutions and 91 convictions for tax credits in 2019 to 2020 compared to 160 prosecutions and 156 convictions for tax credits in 2018 to 2019.

Report required under section 40 of the Tax Credits Act 2002 for the tax year 2019 to 2020

Working Tax Credit Child Tax Credit Total
a) The number of awards of tax credits (thousands) 1,200 2,116 2,320[footnote 1]
b) Number of enquiries conducted under section 19 - - 15,368[footnote 2]
c) Number of penalties imposed (cases) - - 3,314[footnote 3]
Prosecutions Convictions
d) Number of prosecutions and convictions for offences connected with tax credits 94 91

  1. Awards with positive amounts for both WTC and/or CTC are included in each of the first two columns but counted only once in the final column. These figures are published in HMRC’s Child and Working Tax Credit statistics for April 2020. ↩

  2. The total figure cannot be broken down into CTC and WTC because a case may involve both. This figure also includes Section 20 enquiries (where an enquiry is made twelve months or more from the end of the relevant tax year). This figure cannot be broken down to show Section 19 separately. ↩

  3. The total figure cannot be broken down into CTC and WTC because a case may involve both. ↩

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