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Child Tax Credits - Code of Practice 26 - Welcome Changes



January 31st 2008

North Thanet's MP, Roger Gale, has today (Thursday 31st January) welcomed changes made to the Revenue & Customs Code of Practice 26 in the light of concerns expressed in the Parliamentary Ombudsman's report.

In a letter to the MP, as a follow-up to a meeting held  last October, the Financial Secretary to the Treasury, Jane Kennedy, says:

"The revised code will aim to deliver more objective decision making when the HMRC consider whether to write off an overpayment.  To this end COP 26 will no longer include a reference to what is or is not reasonable for a customer to have understood. Instead, HMRC and customers respective responsibilities will be clearly set out.  Importantly, HMRC will have a time-limit (30 days) to act on information reported to them. So if HMRC fails to act within 30 days then any overpayment that occurs after 30 days will be remitted".

Roger Gale, who has waged a parliamentary campaign to change the treasury's self-imposed regulations, says:

"This is good news. For far too long information given to HMRC by claimants has not been acted upon swiftly and that failure to act  has led to overpayments and sometimes horrific reclaims running into thousands of pounds.  I am pleased that the HMRC recognises its own responsibility in this matter and so long as claimants ensure that they notify Revenue and Customs, swiftly, of changes in circumstances demands for large repayments should, for the future, not be made.

Unfortunately the new conditions will only apply to notice of disputes received from today's date onwards and there is clearly a backlog of hard cases that need to be resolved,  the Minister has, though, additionally said that:

"Where a customer asks for a pre-January 2008 disputed overpayment decision to be reconsidered HMRC will make sensible use of their legislative discretion". And that "the department will look to see whether the overpayment occurred because the `reasonable belief` test was applied in a way which, with hindsight, was unfair or inconsistent".

I hope that this will mean that at least some of the outstanding cases will now be swiftly determined in the claimants favour.  HMRC have had a habit of sheltering behind the "you should have known that we had made a mistake" defence and that has caused misery and hardship."

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