TCTM09450 - Decision Making: Revised decisions, considering evidence and recording of decisions: Evidence
Tax Credits Act 2002
Sections 14, 15, 16 and 19 all include the powers to obtain information from third parties, at s14(2)(b), s15(2)(b), s16(3)(b) and s19(2)(b). The wording is only reproduced here once, as it is identical for all four subsections. It says that:
The Board may by notice require any persons of a prescribed description to provide any information or evidence of a prescribed description which the Board consider they may need.
Tax Credits (Claims and Notifications) Regulations 2002, Regulation 30 and 31
The third parties from whom HMRC can require information are prescribed in regulations. The categories of persons are;
- the employer named on the claim form by the claimant (or by either claimant in the case of a joint claim)
- a person the Board has reasonable grounds for believing may be an employer of the claimant (or of either claimant in the case of a joint claim)
- the child care provider named on the claim form by the claimant (or by either claimant in the case of a joint claim)
- a person the Board has reasonable grounds for believing may be a person by whom child care is provided to the claimant (or to either of the claimants in the case of a joint claim)
Formal requests for information from the claimant(s)
The Tax Credits Act (TCA) also provides HMRC with the power to require the claimant(s) to provide any information or evidence which the Board consider they may need. This power is detailed at s14(2)(a), 15(2)(a), 16(3)(a), 18(10) and 19(2)(a) of the Tax Credits Act. The wording of the legislation differs slightly for each of these powers (apart from 18(10) see below), but the basic meaning is the same.
Any information/evidence requested must be relevant and required to make a decision on the rate to award tax credits or to establish the correct rate of entitlement. If the evidence asked for is particularly large or is difficult to obtain, a reasonable period of time should be allowed for the claimant to provide it. For example 12 months bank statements may involve a written request to a bank and also substantial charges may be incurred.
If however the evidence requested is crucial to there being any award/entitlement at all, then the claim/entitlement can and should be rejected/removed.
Note; The wording of 18(10) is substantially different from s14(2)(a), 15(2)(a), 16(3)(a) and 19(2)(a) of the Tax Credits Act.
18(10) Before exercising a function imposed or conferred on them by subsection (1), (5), (6) or (9), the Board may by notice require the person, or either or both of the persons, to whom the notice under section 17 was given to provide any further information or evidence which the Board consider they may need for exercising the function by the date specified in the notice.
Additionally there are no third party powers under s18.
When information is formally requested by HMRC the time to be allowed is specified at s32 of the TCA.
32. Dates to be specified in notices under section 14(2), 15(2), 16(3), 18(10) or 19(2) of the Act
In a notice under section 14(2), 15(2), 16(3), 18(10) or 19(2) of the Act, the date which may be specified shall not be less than 30 days after the date of the notice.
Evidence requested under s16 not received until after 5 April
S16 only allows an award to be revised in-year. So where further information is needed and is not received in time to amend the award on or before 5 April then the amendment must be included when making the conclusive s18 decision.
Types of Evidence
There are three main types of evidence that can be considered when making a decision, these are:
direct - for example, a statement from a childcare provider who says that a particular child has never attended their nursery
indirect - for example, a statement by someone who did not work at the nursery for the whole period but has worked there since
hearsay - for example, a statement by someone recording what they were told , such as that a particular child never attended a nursery
Responsibility of Proof
When a tax credits claim is at pre-award stage (prior to the s14 decision), the onus of proof lies with the claimant, this includes providing all evidence requested within a specified time.
HMRC must be reasonable in any requests for information. If the information requested is not supplied within the time specified a decision should be made on the evidence available.
Once a s14 decision to award a claim has been made, the onus of proof changes depending on which power is used to make a specific decision.
Where a change of circumstances is reported which increases the maximum rate, the change will be dealt with under s15. If HMRC requires any evidence of this change, the onus of proof lies with the claimant.
Where HMRC believe that an award or rate of an award is incorrect or that an award should be terminated, the onus of proof transfers to HMRC.
Where HMRC requires any information or evidence it considers is needed to make a final s18 decision on entitlement, then the onus of proof lies with the claimant.
Where HMRC requires any information or evidence it considers it may need for the purposes of carrying out an enquiry under s19, then the onus of proof reverts back to HMRC. Once a s14 decision to award a claim has been made, the onus of proof transfers and it is up to HMRC to prove that a decision should be amended or an award teminated.
Level of Proof
When making a decision the Decision Maker (DM) need only be able to prove things on the balance of probability. This is not the same as beyond reasonable doubt, which is the standard test for proof in criminal trials.
The balance of probability means deciding whether it is more likely than not that an event occurred, or that an assertion is true. It does not however mean that the claimant should automatically be given the benefit of the doubt.
If evidence is contradictory the DM should decide whether there is enough evidence in favour of one conclusion or the other to show which is the more likely. If there is enough evidence then the DM should decide on the basis of the balance of probability. If not further evidence should be sought.
Example
If the DM has a child’s date of birth recorded on a tax credits claim as 1 February 2010 but it is recorded as 1 March 2010 on Child Benefit records and there is no further information, clearly there is not enough evidence to decide which is correct. However, if the tax credits claim was accompanied by a birth certificate then there is ‘corroborating evidence’ to allow the DM to decide which date of birth is correct.
Alternatively if the DM finds that there is not enough evidence to satisfy them about deciding one way or the other they should ask for more evidence to establish the facts.
Claimants must supply all information and evidence required in connection with the decision. The DM should do as much as possible to see that all the necessary evidence is brought to light.
Evaluating Evidence
There is no rule of law that corroboration of the claimant’s own evidence is necessary. But the DM should not accept evidence from the claimant (or anyone else) uncritically. All evidence needs to be weighed carefully in light of the circumstances of the case.
For example:
A man claimed tax credits as a single person and made his annual declaration as such. Compliance opened an enquiry and discovered he was married and living with his wife (still as a couple). They terminated his award and an overpayment was created. Two weeks after the Compliance decision the claimant again made a claim as a single person.
As there is recent evidence to prove that he may not be single, evidence should be sought to prove a separation by court order or that a separation that is likely to be permanent has actually taken place.
Inherently Improbable Evidence
There will be occasions where evidence submitted or statements given by the claimant are very unlikely to be true. Evidence of this type is commonly known as ‘inherently improbable’.
For example:
A claimant states that he was not aware of the tax credit claim made by his partner with him included on it.
The claim has been in payment for five years to a bank account in his sole name, the account has been emptied on a monthly basis for the entire period. There have been in total 45 tax credit decision notices issued to him at the correct address.
The likelihood that he would not know of the tax credit claim is inherently improbable. The payments were going into a bank account in his sole name and 45 decision notices addressed to him have been issued to the correct address
However should a reasonable argument be put forward to support this statement it should be considered and further evidence sought to back up the statement if it is considered to be required.
For example if the claimant said that his partner had been intercepting his mail whilst he was at work, that the account was used for bills only and that he could provide some evidence to back this up.