Tax Credits Compliance

Debt Advice
Dealing with a Tax Credits Compliance Investigation
Every year, HMRC check thousands of tax credits awards to make sure people are receiving the correct amount of tax credits. They use a combination of random selection and ‘risk profiling’ to identify thousands of claims for checking.
With HMRC’s risk profiling procedures, their systems might identify:
  • another adult linked to the address of a single tax credits claim, using Credit Reference Agency data
  • queries with childcare costs and hours of work – for example, disproportionately high childcare costs
  • anomalies with the data held by HMRC and other government departments, for example the Housing Executive
  • discrepancies with income data the claimant has provided when checked against Real Time Information from their employer
  • a disproportionately low income compared to the number of hours worked
  • other issues or queries that HMRC would like to check about a claim.
Some claimants worry that another person has ‘reported’ them to HMRC. This is not normally the case. It is much more likely that any claim has been selected at random or after identifying an element of risk.
Typically, HMRC will request information like bank and building society statements, a mortgage statement or tenancy agreement, childcare receipts and any legal documents relating to a couple’s separation.
Information will normally have to cover the period being investigated – this should be stated on the letter notifying the claimant of the investigation.
Sometimes the information being requested is difficult to access and may even seem irrelevant. However it is very important to comply with the request and provide all the evidence that has been asked for. If the information cannot be provided by the date specified, the claimant should contact the compliance officer who is dealing with their case. They might agree to allow extra time or suggest alternative evidence that could be provided.
HMRC now use a third party company, Concentrix, to carry out some of their compliance investigations. A compliance investigation or enquiry may be carried out by either HMRC or Concentrix, working on behalf of HMRC. Letters issued by Concentrix will normally be branded with both the HMRC and Concentrix logos. 
We understand that a Tax Credits compliance investigation or enquiry can be a very daunting and intrusive experience. Advice NI can provide free, impartial, confidential advice with this area. 
  • Tax & Benefits

    Free help and advice

    To speak to an adviser about tax and benefits contact our FREEPHONE helpline:

    0800 988 2377

    Monday to Friday
    9am to 5pm