HMRC internal manual

Tax Credits Manual

From:: HM Revenue & Customs
Published: 9 April 2016
Updated:: 19 November 2024 - See all updates

TCM0304350 - Specialist areas: international: miscellaneous: derived rights

Checklist

Before you follow this guidance make sure

you are in the correct MU. Use TCM0322460 for the correct MU number
you have access to the International Group Database (IGDB) and know how to obtain and update customer information on it
you have the correct user roles, to follow this guidance.

Background

An EU national living in the EU Member State can claim a derived right to child tax credits (CTC), provided that they are the natural or legal person maintaining a child of another EU national who is

subject to the legislation of the United Kingdom (UK)
is entitled to, but does not claim, CTC
the main source of financial support for the child in question.

Note:The EU national subject to UK legislation does not need to live in the UK they may be a cross border worker.

Note:For the purpose of CTC guidance only, the EU national subject to UK legislation will be known as ‘the person entitled to claim’.

Note: From 6 April 2014 there has been a change to Full time non advanced education (FTNAE) where an end date of 31/08/CY will be applied on NTC. This change applies to 18 and 19 year olds. The customer will have to inform us each year whether the qualifying young person is continuing in FTNAE. Where the customer does not inform Tax Credits, the CTC will end. This must be considered in all manual calculations.

Note: Where a qualifying young person currently in FTNAE has an end date of either 31/08/CY or 31/08/CY+1 applied on NTC and is reaching the age of 20, the system will only pay Child Tax Credit up to the day prior to their 20th birthday.

Note: The 50+ element will be withdrawn on 6 April 2012. Award notices issued from 11 October 2011 will show a revised award for 2011-2012 but will not explain that the 50+ element will stop in April 2012.

The EU Member State will contact Child Benefit Processing using an E form to let us know about a person living in the EU Member State who may have entitlement to UK family benefits under derived right. On receipt of the E form, Child Benefit Processing will issue a Child Benefit (ChB) / tax credit claim pack and SEES CH15 Derived Right to decide on entitlement to ChB and CTC.

Guidance

Note: When sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian / Data Security Team for advice

Note: Remember, when dealing with any referrals from Compliance, to update the Compliance officer by phone once your actions are complete and provide any information they ask for.

Note: From 6 April 2017, customers will only get the Family Element of Child Tax Credit where they are responsible for a child or children born before that date.

Note: The individual child element of Child Tax Credit will no longer be awarded for third and subsequent children or qualifying young persons in a household, born on or after 6 April 2017, unless it meets the exception criteria.

Note: If you are dealing with a claim where the exception marker has been applied to any of the children/young persons included in the claim contact the Exception Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) . (This content has been withheld because of exemptions in the Freedom of Information Act 2000) For how to check if the exception marker has been applied, use TCM1000314.

Note: If you are dealing with a claim where the customer states they are claiming for a child/young person who is an exception contact the Exception Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) . (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Step 1

If you are dealing with a new work item, go to Step 2.

If you are dealing with a returned Employment Check enquiry or on expiry of BF for an Employment Check enquiry, go to Step 10.

If you are dealing with expired BF because contributions based Job Seekers Allowance has been in payment for six months go to Step 28.

If you are dealing with returned E400 series forms or SEDs by the EU Member State or the expiry of BF for these E Forms, go to Step 19.

If you have received a NINO / NONO from STU or the BF has expired on your request, go to Step 26.

Step 2

On receipt of a claim to CTC

link with manual file which holds a copy of SEES CH15 Derived Right
check for any change of circumstances. To do this
- check the manual file for any WAM referrals, physical change of circumstances or a copy of the ‘Free Format’ screen
check the Unprocessed Change of Circs work list. For how to do this, use TCM1000208.

If there is a Verification Failures - Rule 5 - Child in current NTC award (pre-award)

there is no entitlement to CTC under Derived Rights.
to disallow go to Step 49.

If there are any other change of circumstances, contact your TALLO for advice on what to do next.

If there are not any change of circumstances, go to Step 3.

Step 3

Check CH15 Derived Right for the name of the person entitled to claim.

Note: The person entitled to claim is the person subject to UK legislation who is purportedly entitled to CTC but who has not claimed.

trace the NINO of the person entitled to claim on ADD. For how to do this follow the ADD guidance.

If the NINO of the person entitled to claim has been traced go to Step 4.

If the NINO of the person entitled to claim has not been traced.

the claim to CTC can not be considered because we do not have enough information to trace the person entitled to claim.
to reject the claim go to Step 50.

Step 4

Check CH15 Derived Right to determine if the EU Member State customer and the person entitled to claim are separated by distance only.

If they are separated by distance only

Note: A joint claim to CTC claim should be made by the person entitled to claim.

entitlement to CTC can not be considered under Derived Rights
update the IGDB. For how to do this, use TCM1000408
inform EU Member State using E001 or SED. For how to do this use TCM0305100
contact your TALLO for advice on what to do next.

If they are permanently separated go to Step 5.

Step 5

Check the information provided on the CH15 Derived Right to determine if the child / children living in the EU Member State is / are dependent on the person entitled to claim.

For instance where the customer in the EU Member State has said they only receive financial support from the person entitled to claim, does the person entitled to claim contribute more than half, in terms of money or help, to support the needs of the dependant child.

Note: For CTC purposes only - In order for the child / children to be considered mainly dependent and as such a ‘member of the family’, the EU national who is purportedly entitled to claim UK family benefit does not have to be the only source of financial support - but he must be the main source of financial support.

If the child is receiving financial support in addition to the support from the EU Member State customer and the person entitled to claim (for instance the partner of the EU Member State customer or a third party is also contributing to the maintenance of the child),contact your TALLO for advice on what to do next.

If the child / children is / are dependent on the person entitled to claim go to Step 6.

If the child / children is / are not dependent on the person entitled to claim

there is no entitlement to CTC under Derived Rights
to disallow go to Step 49.

If there is any doubt that child / children is / are dependent on the person entitled to claim contact your TALLO for advice on what to do next.

Step 6

Access the IGDB to check if CBO have issued E Forms / SEDs.

Note: Where CBO have issuedE Forms / SEDs they must have confirmed that the conditions under derived rights are satisfied.

If CBO have issued E Forms / SEDs go to Step 19.

If CBO have not issued E Forms / SEDs go to Step 7.

Step 7

Check the CH15 Derived Right to determine if the person entitled to claim is employed / self-employed or receiving a Qualifying Benefit, then check PAYE, NPS, ADD, NTC and TBS systems to confirm information provided.

Note: For the purposes of Derived Rights the person entitled to claim must be receiving a qualifying benefit that is supported by European Union (EU) regulations. These are:

Contributions based Job Seekers Allowance
Incapacity Benefit
State Pension, Widow’s Benefit / Bereavement Benefit
Industrial Injuries Disablement Benefit
Main Phase Contribution-based Employment and Support Allowance
Severe Disablement Allowance
make a note of the date employment / self employment started or the date the Qualifying Benefit was awarded on a form TC648 as you will need this information later.

If the person entitled to claim is employed go to Step 8.

If the person entitled to claim is not employed go to Step 13.

Step 8

The person employed in the UK must be liable to pay, and paying, UK Class 1 national insurance contributions (NICs) that are due.

access National Insurance and PAYE Service (NPS) to check if it shows the person entitled to claim is paying Class 1 National Insurance Contributions (NICs). To do this insert the NINO of the person entitled to claim, where it refers to the customer.

If payment of Class 1 NICs is verified

accept the person entitled to claim is fully affiliated to the UK NICs scheme
go to Step 11.

If payment of Class 1 NICs is not verified go to Step 9.

Step 9

Check if CBO have contacted the employer to confirm payment of class 1 NICS.

contact CBO to check if they have carried out an employment check. For how to do this, use TCM0304150.

If CBO have completed the employment check and the employment conditions are satisfied

accept the employment conditions are satisfied for CTC
go to Step 11.

If CBO have completed the employment check and the employment conditions are not satisfied

the person entitled to claim does not satisfy the conditions under EU regulations as an employed person
to check if any other conditions are satisfiedgo to Step 13.

If an employment check has not been completed by CBO

contact your TALLO for advice on what to do next
Note: TALLO may need to contact LAAT to agree process for contacting the ‘Person entitled to claim’ to complete employment check
carry out any enquiries instructed by TALLO to enable the employment check to be carried out, then
go to Step 10.

Step 10

Enquiry for Employment Check returned or BF expired.

Note: Where payment of Class 1 NICs is verified but payments are not consistent this maybe due to varying hours of work. The amount and type of NICs the customer pays depends on what they earn. For information on the rates of NICs payable, visit .

If payment of Class 1 NICs is verified

note the TC648 of the date the conditions are satisfied under EU regulations as an employed person
update the IGDB. For how to do this, use TCM1000408
go to Step 11.

If the enquiry is returned and payment of Class 1 NICs is not being paid because the person entitled to claim is not earning enough

do not accept that the person entitled to claim is liable and paying Class 1 NICs and therefore does not satisfy the conditions under EU legislation as an employed person
update the IGDB. For how to do this, use TCM1000408
to check if any other conditions are satisfied go to Step 13.

If the enquiry confirms the person entitled to claim is not working

do not accept that the person entitled to claim is liable and paying Class 1 NICs and therefore does not satisfy the conditions under EU legislation as an employed person
to check if any other conditions are satisfied go to Step 13.

If enquiry is not returned or returned RLS

the claim to CTC can not be considered because we do not have enough information to decide on the claim
to reject the claim go to Step 50.

Step 11

Check whether the person entitled to claim is an A2 national.

If the person entitled to claim is an A2 national go to Step 12.

If the person entitled to claim is not an A2 national go to Step 19.

Step 12

Use WAS to check if the person entitled to claim is working legally.

If the person entitled to claim is working legally go to Step 19.

If the person entitled to claim is not working legally contact your TALLO for advice on what to do next.

Step 13

If the person entitled to claim is self employed go to Step 14.

If the person entitled to claim is not self employed go to Step 18.

Step 14

The person self employed in the UK must be compulsory insured in the UK, by this we mean liable to and paying UK Class 2 national insurance contributions (NICs).

Note: All Class 2 NICs due to be paid within the bill period, must have been paid.

check the date they became self employed in the UK
check if NPS shows details about the person entitled to claim
note the TC648 of the date the conditions are satisfied under EU regulations as a self employed person.

If details are held about the person entitled to claim go to Step 15.

If details are not held about the person entitled to claim

contact TALLO and ask them to establish if the person entitled to claim has
- registered as self employed
- been issued a Class 2 NICs bill and if so whether the bill has been paid or is due to be paid
- paid their Class 2 NICs, that are due to be paid, within the given period
go to Step 15.

Step 15

Check the liability summary screen within the ‘Contributions’ held in the ‘Financials Folder Window’ on NPS or check the information provided by TALLO.

If Class 2 liability is shown go to Step 16.

If NPS or TALLO do not hold details about the person entitled to claim and the self employment started less than three months ago contact TALLO for advice.

If NPS or TALLO do not hold details about the person entitled to claim and the self employment started more than three months ago

do not accept that the person entitled to claim is liable and paying Class 2 NICs and therefore does not satisfy the conditions under EU legislation as a self employed person
to check if any other conditions are satisfied go to Step 18.

If payment of Class 2 NICs is not being made because a lower earnings certificate has been issued

do not accept that the person entitled to claim is liable and paying Class 2 NICs and therefore does not satisfy the conditions under EU legislation as a self employed person
to check if any other conditions are satisfied go to Step 18.

Step 16

Check the ‘Bill Status’ field within the ‘Bills Summary’ page held in the ‘Financials Folder Window’ on NPS or check the information provided by TALLO.

Note:The status field will always show an entry. Bill details will only be created in the ‘Bills Summary’ and ‘Bill Details Window’ once a bill has been produced.

note the TC648 of the date the conditions are satisfied under EU regulations as a self employed person.
Note:A self employed person who is insured in the UK has liability for Class 2 in each week of their self employment and has up to three months to register with HMRC. After registration, they might not have to pay for six months, when they do so, they may then pay in arrears. The contribution account might not be updated immediately by NIC&EO.

If the status is displayed as ’PAID’ or ’PART PAID’

accept the person entitled to claim is liable and paying Class 2 NICs
go to Step 19.

Note: Where part payment is shown, any outstanding payments will usually be requested when the next bill is issued.

If the status is displayed as ‘UNPAID’ for a current bill

check the ‘Latest Date Of Issue’ field
make a note on of the date the person entitled to claim has to pay their bill
go to Step 17.

If the status is displayed as ‘UNPAID’ for two or more bills

do not accept that the person entitled to claim is liable / paying Class 2 NICS and therefore does not satisfy the conditions under EU legislation as a self employed person
to check if any other conditions are satisfied go to Step 18.

If the status is displayed as ‘NOT APPLICABLE’, contact TALLO for advice. {#}

Note: This is an indication that the conditions under which the bill was originally issued may have changed.

Step 17

Example 1

Bills issued in October 2011 will require payment from the migrant worker by 31 January 2012. This bill covers the period 6 April 2011 to 5 October 2011.

Example 2

Bills issued in April 2012 will require payment from the migrant worker by the 31 July 2012. This bill covers the period 5 April 2012 to the 6 October 2012.

If the date you are working on is past the due date for payment of the class 2 bill

do not accept that the person entitled to claim is liable and paying Class 2 NICs and therefore does not satisfy the conditions under EU legislation as a self employed person
to check if any other conditions are satisfied go to Step 18.

If the date you are working on is on or before the due date for payments of the class 2 bill

accept the person entitled to claim is liable and paying Class 2 NICs from the date self employment started
go to Step 19.

Step 18

If the person entitled to claim is receiving a Qualifying Benefit (listed at Step 6), go to Step 19.

If the person entitled to claim is not receiving a Qualifying Benefit

there is no entitlement to CTC under Derived Rights
go to Step 49.

Step 19

Note: The make up of the family needs to be verified by the EU Member State for all the children and young persons on the tax credits claim who live in the EU but outside the UK this may already be shown on the original E Form. The rates of any Social Security Benefits paid by the EU Member State will need to be confirmed on E411.

check TC648 and the IGDB to determine if CBO have issued the appropriate E400 series forms or SEDs, for how to do this, use TCM1000408 and TCM1000334 and update TC648 of
- when the E400 forms or SEDs where issued
- whether duplicate E400 forms or SEDs have been issued
- whether it has been more than three months since the last E400 forms or SEDs were issued
- the BF date Child Benefit Office (CBO) have set for the return of the E400 series forms or SEDs.

If you already have on file all the information required from the EU Member State, go to Step 22.

If the E400 series forms or SEDs have been issued by CBO, go to Step 20.

If the E400 series forms or SEDs have already been issued by TCO, go to Step 21.

If the E400 series forms or SEDs have not been issued by CBO or TCO

send the appropriate E400 series forms or SEDs to the EU Member State where the children and young persons live. Follow the guidance in TCM0305100. For how to do this, use TCM1000334
update the IGDB with details of the E400 series forms or SEDs you will issued to the EU Member State. For how to do this, use TCM1000408
set a BF date on the manual file and an action date on each linked work list item for
- Polish EU Member State - three months
- any other EU Member State - two months. For how to do this, use TCM1000008
update ‘Application Notes’ with the message II62 from TCM0160040. For how to do this, use TCM1000028
update the manual file with the action you will taken.

Step 20

Where CBO have issued the E Forms or SEDs, check for any change of circumstances. To do this

check the manual file for any WAM referrals, physical change of circumstances or a copy of the ‘Free Format’ screen
Note: The Change of Circumstances Team will have linked any WAM referrals or physical change of circumstances to the manual file, if appropriate
check the ‘Unprocessed Change of Circs’ work list. For how to do this, use TCM1000208.

If there are any change or circumstances contact your TALLO for advice on what to do next.

If the E400 series forms or SEDs have been returned by the EU Member State, go to Step 22.

If a reply has not been received and three months have not elapsed since the E400 series forms or SEDs were sent

set a BF date of two weeks from BF date shown on IGDB for return of forms
return the file to the manual BF run.
Note: Resolve any queries with the information shown on the IGDB by contacting CBO and asking for an update. Follow the guidance in TCM0304150.

If a reply has not been received and three months have elapsed since the E400 series forms or SEDs were sent

there is no entitlement to CTC under Derived Rights
go to Step 49.

Step 21

Where TCO have issued the E Forms or SEDscheck for any change of circumstances. To do this

check the manual file for any WAM referrals, physical change of circumstances or a copy of the ‘Free Format’ screen.
Note: The Change of Circumstances Team will have linked any WAM referrals or physical change of circumstances to the manual file, if appropriate.
check the ‘Unprocessed Change of Circs’ work list. For how to do this, use TCM1000208.

If there are any change or circumstances contact your TALLO for advice on what to do next.

If the E400 series forms or SEDs have been returned by the EU Member State, go to Step 22.

If duplicate E400 forms or SEDs have not been issued

issue duplicate E400 forms or SEDs to the EU Member State. Follow the guidance in TCM0305100
update the IGDB to show that duplicate E400 forms or SEDs have been issued. For how to do this, use TCM1000408
update the manual file to show that duplicate E400 forms or SEDs have been issued
set a BF date of
- three months when dealing with the Polish authorities
- two months when dealing with any other authority
return the file to the manual BF run.

If duplicate E400 forms or SEDs have been sent and three months have elapsed

there is no entitlement to CTC under Derived Rights
go to Step 49.

Step 22

Consider the information you have received from the EU Member State. Follow the guidance in TCM0305100.

If the EU Member State confirm the details of the family are the same as those stated on the tax credit claim form and CH15 Derived Right

make a note of this on form TC648
go to Step 23.

If the EU Member State do not confirm the details of the family are the same as those stated on the tax credit claim form and CH 15 Derived Right, contact your TALLO for advice on what to do next.

Step 23

Check the manual file to determine if you will made a note that the customer has reported a change of circumstances also check if there are any linked work list items for this claim. For how to do this, use TCM1000142.

Note: This change of circumstances could have been reported by a work list entry, a ‘Work Area Mailbox’ (WAM) referral or a change the customer has reported in writing. If the customer has reported a change of circumstances or there are linked work list items contact your TALLO for advice on what to do.

If the customer has not reported a change of circumstances or there are no linked work list items, go to Step 24.

Step 24

Check the manual file to determine if we know if the EU Member State customer and, where appropriate any partner they have living with them in the EU Member State, has a NINO or NONO.

If we know the EU Member State customer, and where appropriate their partner, has a NINO or NONO, go to Step 27.

If we do not know whether the EU Member State customer, and where appropriate their partner, has a NINO or NONO, go to Step 25.

Step 25

Trace and match the EU Member State customer and, where appropriate any partner they have living with them in the EU Member State. For how to do this, use TCM1000404.

Note: Any possible match should be consistent with the rules for defining an acceptable match, refer to TCM0322010.

If you are able to trace and match the EU Member State customer and, where appropriate any partner they have living with them in the EU Member State, go to Step 27.

If you are not able to trace and match the EU Member State customer and, where appropriate any partner they have living with them in the EU Member state

complete form (This content has been withheld because of exemptions in the Freedom of Information Act 2000) requesting a NONO. For how to do this, use TCM1000261
Note:To request a NONO for a partner living with the EU Member State customer, complete a separate CA8288.
Note: You must enter ‘International Case, NONO required’ in the ‘Further Information’ box.
email the CA8288 to your line manager for them to complete the ‘Supervisor’ checkbox
(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
update Application Notes with the message II63 from TCM0160040. For how to do this, use TCM1000028
set an action date on each linked work list item for seven working days in the future. For how to do this, use TCM1000008
Note: Only set an action date if an action date has not already been set whilst following this guidance.
update the manual file with the action you will taken including the action date you have set for the STU action to be completed
return the file to the manual BF run.

Step 26

When the action date has expired.

Note: If you will set an action date twice (a total of 14 days) and STU still have not allocated a NONO, contact your TALLO for advice.

If STU has provided a NONO, go to Step 27.

If STU has not yet replied, contact your line manager for advice.

Step 27

If entitlement under derived right is based on the person entitled to claim being in receipt of Contribution Based Job Seekers Allowance go to Step 28.

If entitlement under derived right is based on any other condition go to Step 29.

Step 28

Check TC648 for the date contributions based Job Seekers Allowance was awarded.

Note:Contributions based Job Seekers Allowance is payable for six months then the claimant goes on to income based Job Seekers Allowance, unless they become employed / self employed.

If six months have passed since the award date of contributions based Job Seekers Allowance

there is entitlement for the six month period contributions based Job Seekers Allowance is in payment
access PAYE, NPS, ADD, and TBS to check if the person entitled to claim can satisfy the conditions after contributions based Job Seekers Allowance ends because of employment, self employment or by receiving another Qualifying Benefit, then
go to Step 29.

If six months have not passed since the award date of contributions based Job Seekers Allowance

there is entitlement for the six month period contributions based Job Seekers Allowance is in payment
note the manual file of the date the six month period will have passed
depending when the six months are up consider waiting for this date before proceeding to next step.
or
go to next step to calculate entitlement, then recalculate at a six months stage if entitlement can continue under any other condition
go to Step 29.

Step 29

Before you manually calculate CTC, decide which elements of tax credits are to be paid. For example - baby element / children / qualifying young person.

Note: From 6 April 2017, customers will only get the Family Element of Child Tax Credit where they are responsible for a child or children born before that date.

Note: From 6 April 2017, customers will only get the child element of Child Tax Credit (CTC) for up to 2 children. If they are already claiming tax credits for more than 2 children born before 6 April 2017, they will continue to get tax credits for each of them.

Note: If you are dealing with a claim where an exception marker has been applied to any of the children/young persons included in the claim or the customer is reporting a change relating to an exception contact the Exception Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) . For how to check if the exception marker has been applied, use TCM1000314.

Note: The baby element has been withdrawn. Any new claims made after 6 April 2011 with a baby under the age of one year that requires backdating into Previous Year (PY) will only receive the baby element of the family element for any entitlement in the 93 days prior to 6 April 2011.

Note: Where the customer is living in the EU Member State and they have a partner living in the EU Member State, use both income figures, however, do not include the income figure of the ‘person entitled to claim’.

Note: The 50+ element will be withdrawn on 6 April 2012. Award notices issued from 11 October 2011 will show a revised award for 2011-2012 but will not explain that the 50+ element will stop in April 2012.

use the SEES ‘Tax Credits Entitlement Calculator’ to calculate CTC, for how to do this, use TCM1000089
Note: The effective date of claim of your calculation will be the date the E Form was received.
Note: Where the period from the date of E Form received to today’s date has passed 5 April, you will need a separate entitlement calculation for both the previous year (PY) and current year (CY).
calculate the effective date of claim, you must also take into account
- claims made may be backdated up to 31 days
  Note: Claims made prior to 6 April 2012 may be backdated up to 93 days
- the date the person entitled to claim started employment / self employment and paid NICS or started to receive contribution based JSA or a Qualifying benefit.
  Note:Contribution based JSA is only paid for six months. After the six months has expired, the person entitled to claim must satisfy another condition.
- the end date if the award is for a closed period
- child’s date of birth
print off a copy of the SEES calculation to keep with the manual file
go to Step 30.

Step 30

Use the shared SEES decision tree ‘Tax Credit EEA Competence for Family Benefits’ to decide whether the EU Member State or the UK are competent to pay the family benefits. For how to do this, use TCM1000257.

Note: Use the ‘person entitled to claim’ as ‘Customer 1’ and the EU Member State customer as ‘Customer 2’. Where the customer in the EU Member State has a partner living with them, contact your TALLO for advice.

If the UK is competent to pay the family benefits, go to Step 32.

If the EU Member State is competent to pay the family benefits

contact TALLO to consider supplement action
once a supplement has been considered, go to Step 32.

If there has been a switch in competency to pay the family benefits from UK to EU Member State or EU Member State to UK, go to Step 31

Note: A switch in competency is where the competency to pay the family benefit switches from the EU Member State to the UK or from the UK to the EU Member State. This can happen when there is a change in the customer’s circumstances.

From using the B&C EEA Competency for Family Benefits decision tree you will be able to determine whether the competency to pay family benefits has switched from EU Member State to UK, or UK to EU Member State.

Step 31

If there is a switch in competency and the UK is now competent to pay the full rate of family benefits

award from the earliest possible date of entitlement
consider supplement from the earliest possible date of entitlement to the end of the month following arrival
pay CTC in full from beginning of month following arrival

If there is a switch in competency and the EU Member State is now competent to pay, with the UK paying a supplement

consider supplement, follow the guidance in ‘How to calculate a supplement for EEA customers with abroad involvement’
Note: Until this guidance is published, ask your TALLO for advice on what you need to do.
pay the full rate until the end of the current month, then pay the supplement from the beginning of the month following arrival

Step 32

Check for any overlap of entitlement to family benefits paid in the EU Member State and the UK.

If family benefits have / are being paid in the EU Member State

update IGDB. For how to do this, use TCM1000408
complete and issue E001 to EU Member State advise reimbursement available. For how to do this, use TCM1000334
consider whether an interim payment can be sent to the EU Member State customer
to issue payment or on return of enquiries from EU Member State, go to Step 33.

If family benefits have not been paid in the EU Member State go to Step 33.

Step 33

Check the manual file to determine if all the following details are noted

details of all the children and / or young persons
full name
date of birth
child responsibility start date, if it is different from the date of birth
main carer details
payment frequency
whether the customer has provided details of a bank account or wants to be paid by giro.

If all the details are noted in the manual file, go to Step 34.

If all the details are not noted in the manual file

obtain the missing details from the tax credits computer. For how to do this, use TCM1000249
update the manual file with the missing details
go to Step 34.

Step 34

Access function ‘Manage Verification Failures’ for the claim you are working.

Note: You must access function ‘Manage Verification Failures’ from the ‘Verification Failures’ work list and not directly from the ‘Function Menu’. For how to do this, use TCM1000004 and TCM1000107

manually verify the rule 12 verification failure
manually verify any other verification failures
go to Step 35.

Step 35

Process the claim to status ‘Award Issued’

Note: You must access ‘Amend Application Corrections’ following the process at Step 34.

update the manual file with the action you will taken
go to Step 36.

Step 36

Check if the status of the claim is now ‘Award Issued’. For how to do this, use TCM1000118.

Note: The tax credits computer can take up to 48 hours for the status of the claim to change to ‘Award Issued’. During this time, you must check regularly to determine if the claim status has changed.

Note: Do not refer the case to your TALLO without first allowing 48 hours for the status of the claim to change to ‘Award Issued’.

check if the status of the claim is now ‘Award Issued’. For how to do this, use TCM1000118.

If the status of the claim is ‘Award Issued’, go to Step 37.

If the status of the claim is not ‘Award Issued’, contact your TALLO for advice on what to do.

Step 37

Check the manual file to determine if the customer has provided details of a bank account

If the EU Member State customer has provided bank account details, go to Step 38.

If the EU Member State customer has not provided bank account details

update Household Notes with the message II64 from TCM0160040. For how to do this, use TCM1000001
go to Step 38.

Step 38

Note: You must complete Step 40 to Step 41 in their entirety at the same time to avoid any system generated payments and forms being issued to the customer.

Set the ‘Complex Case’ and ‘Manual Correspondence’ markers. For how to do this, use TCM1000136
complete the ‘Amend Finish’ screen. For how to do this, use TCM1000032
Note: The ‘Complex Case’ and ‘Manual Correspondence’ markers will not be set until you complete the ‘Amend Finish’ screen
go to Step 39.

Step 39

Select the case you are working from the ‘Unprocessed Changes of Circs’ work list with ‘COC’ in the ‘Change Details’ column. For how to do this, use TCM1000208.

apply the ‘Free Format’. For how to do this, use TCM1000233
Note: Do not apply the Free Format note where there is a reported change of circumstances that is also on the Free Format note or another ‘Unprocessed Changes of Circs’ work list item with a reason other than ‘COC’. Contact your TALLO for advice on what to do.
Note: You may need to repeat this action as there may be more than one ‘Free Format’ which has generated an ‘Unprocessed Changes of Circs’ work list item with the reason ‘COC’.
go to Step 40.

Step 40

Note: When you have applied the ‘Free Format’, you will be taken back to the ‘Maintain Worklist’ screen.

check if the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has been deleted. For how to do this, use TCM1000208.

If the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has been deleted, go to Step 43.

If the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has not been deleted

delete the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column. For how to do this, use TCM1000160
go to Step 41.

Step 41

Check if an award version has been created which has a payment schedule. For how to do this, use TCM1000373.

Note: The tax credits computer can take up to 48 hours for the payment schedule to be set up. During this time you must check regularly to determine if a payment schedule has been set up.

If an award version has been created that has a payment schedule set up

make a note of any payments that have been issued. For how to do this, use TCM1000312
go to Step 42.

If an award version has been created that has not had a payment schedule set up, go to Step 44.

Step 42

Note: The tax credits computer can take up to 48 hours for the payment schedule to be set up. During this time you will need to check regularly to determine if a payment schedule has been set up.

If a payment schedule has not been set up, refer to TALLO for advice.

Note: Do not refer to your TALLO without first allowing 48 hours for the payment schedule to be set up.

If a payment schedule has been set up (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

make a note if any payments have been made. For how to do this, use TCM1000312
go to Step 43.

If a payment schedule has not been set up (This content has been withheld because of exemptions in the Freedom of Information Act 2000) , contact your TALLO for advice.

Note: Do not refer to your TALLO without first allowing 48 hours for the payment schedule to be set up.

Step 43

Suspend the payments. For how to do this, use TCM1000232

Note: This will create a ‘Suspended Payments (Payments)’ work list item.

transfer the ‘Suspended Payments (Payments)’ work list item to your MU. For how to do this, use TCM1000023
set an action date of 180 days in the future on the ‘Suspended Payments (Payments)’ work list item. For how to do this, use TCM1000008
update the manual file with the action you have taken
update Household Notes with the message II54 from TCM0160040. For how to do this, use TCM1000001
go to Step 44.

Step 44

Check if any payments have been made to the customer. For how to do this, use TCM1000312.

If payments have not been made to the EU Member State customer, go to Step 46.

If giro payments have been made to the EU Member State customer

make a note of the total net amount paid on form TC648
go to Step 46.

If BACS payments have been issued to the EU Member State customer

contact the Bank Liaison Team to recall the payments. For how to do this, use TCM1000134
go to Step 45.

Step 45

If the BACS payments could not be recalled

make a note of the net amount paid on form TC648. For how to do this, use TCM1000312
go to Step 46.

If the BACS payments have been recalled, go to Step 46.

Step 46

Complete the appropriate payment details forms and pass them to your manager for checking

Note: You will need to complete a ‘Manual Calculation Sheet’ for each tax year you have calculated CTC entitlement for.

Note: If the customer has already received payments for the award period, make sure you adjust the yearly award by the amount of payments already issued.

once the appropriate payment details forms have been passed as correct by your manager, go to Step 47.

Step 47

Using the information on the form TC648 and ‘Manual Calculation Sheet’

complete a TC602 manual award notice for the CTC award. For how to do this, use TCM1000275
include variable ‘nil award to WTC’
complete SEES letter TC1124
Note: Where the period from the start date of the claim to today’s date has passed 5 April, you will need to issue a TC602 manual award notice for each tax year.
issue TC602 manual award notice to the EU Member State customer
update Household Notes with the message II35 from TCM0160040. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001
update Household Notes with the message II52 from TCM0160040. For how to do this, use TCM1000001
send the appropriate payment details forms to the Manual Payments Team
go to Step 48.

Step 48

Send form E001 or SED to the EU Member State to inform them of the family benefits being paid in the UK so that they are not also paying them. Follow the guidance in TCM0305100

keep a copy of the form in the manual file
pass the ‘Payment stencil’ to the Manual Payments Team
pass the manual file to the Renewals Team.

Step 49

To disallow because there is no entitlement under derived rights

update the IGDB. For how to do this, use TCM1000408
inform EU Member State using E001 or SED. For how to do this, use TCM0305100
prepare for issue with TC602 SEES letter
- TC1124 - where there is no entitlement to CTC under Derived Rights
  or
- TC1096 - where the EU Member State have not returned the E forms or SEDs
send a manual form TC601 to the customer
update Household Notes with the message II65 from TCM0160040. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001.

Step 50

To reject the claim

update the IGDB. For how to do this, use TCM1000408
inform EU Member State using E001 or SED
follow the guidance in TCM0070020 to reject the claim, insert the reason in the free text facility as “you have not provided enough information to trace”.
Note: User to insert name of person entitled to claim.

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