HMRC fail - Working Tax Credits and National Insurance credits

dul50n

Bit of a long winded tale this, but it might be useful to somebody

Back in 2018 before my son was due to turn 12 and my wife's automatic NI credits from the child benefit claim that contributed towards her state pension qualifying years were due to stop, I had a closer look at the tax credits legislation

I knew that there were NI credits associated with WTC claims but I wasn't sure who could or could not receive them under a joint claim

I worked 35 hours per week and my wife worked 8 hours per week

In HMRC's Tax Credits Technical Manual, guidance at TCTM08101 states:

In an award made under a joint claim where both members of the couple are in qualifying remunerative work they must decide between themselves which of them is to receive the WTC

Further guidance at TCTM02410 outlines the conditions treated as being in qualifying remunerative work:

1. The person is an employed person or a self-employed and is working at the date of the claim
2. The person is aged at least 16 and is a member of a couple where at least one partner undertakes work for not less than 16 hours per week and the aggregate number of hours for which the couple undertake work is not less than 24 hours per week
   
3. The work must be expected to last at least 4 weeks after making the claim
   
4. The work must be done for payment or in expectation of payment
   

From this it was clear to me that we could elect that my wife was paid the WTC and benefitted from the associated NI credits towards her state pension, but what came next was nearly four years of correspondence with HMRC who repeatedly rejected our election outright even when presented with their own guidance

Our complaint went through both Tier 1 and Tier 2 reviews without any recognition of HMRC's own guidance or tax credit legislation, they simply stated, incorrectly, that my wife could not be paid WTC and receive the NI credits because she worked less than 16 hours per week

We took our complaint to The Adjudicators Office in January and have recently received their decision to fully uphold our complaint and my wife has now received NI credits for the last four tax years

So there you go, what can we learn from this?

HMRC clearly don't know the rules and if you're in a couple making a joint WTC claim where one of you works many more hours than the other then HMRC might be paying WTC to the one who doesn't need the NI credits, but you have the right to elect whichever one of you receives WTC and NI credits

However, you might have a fight on your hands


 

wakeupalarm

So would this scenario be the same for universal credit? 

calcotti

wakeupalarm said:

So would this scenario be the same for universal credit? 

No. A couple claiming UC both get Class 3 NI credits.