Tax credits award was not updated

What happened

Mr A claimed tax credits with his wife in early 2010. He incorrectly stated that he received income-based Jobseeker's Allowance, when he was in fact receiving contribution–based Jobseeker's Allowance. This had the effect of giving him a higher entitlement to tax credits than he should have had.

HMRC wrote to Mr A the next month. It said that it had received information from the Department for Work and Pensions that he got contribution–based Jobseeker's Allowance, and asked him to confirm this. It said that if he did not do so, it would correct his record the next month.

Mr A called HMRC soon after and then wrote. Each time he got in touch, Mr A confirmed that he got contribution–based Jobseeker's Allowance, not

income-based Jobseeker's Allowance. However, HMRC did not adjust its records to show this. As a result, Mr and Mrs A were overpaid tax credits between winter 2009 and summer 2010, when another system check by HMRC suggested that Mr A still got contribution–based Jobseeker's Allowance. HMRC acted on this, and sent award notices to Mr A and his wife that indicated that they had been overpaid nearly £1,800 in 2009-10 and nearly £1,500 in 2010-11.

Mr A complained about HMRC's actions and the overpayments, ending with an investigation by the Adjudicator's Office. The Adjudicator's Office did not uphold the complaint. It accepted that HMRC had failed to properly react to Mr A's confirmation that he was receiving contribution–based Jobseeker's Allowance, but considered that his failure to contact HMRC after receiving still incorrect award notices in spring 2010 meant that Mr and Mrs A had not fulfilled their responsibilities.

Mr A also complained about the Adjudicator's Office.

What we found

We partly upheld this case. Whilst we understood the Adjudicator's conclusion that Mr and Mrs A had not fulfilled their responsibilities under HMRC's Code of Practice 26, we considered that they had taken reasonable and appropriate steps to notify HMRC of the inaccuracy in the records when they telephoned and wrote to it.

We did not uphold the complaint about the Adjudicator's Office because this was largely a matter of judgment and we saw no grounds for saying that its approach to the complaint was at fault.

We upheld the complaint about HMRC. Its letter saying that it would correct its records in spring 2010 if it did not hear from Mr A, created a reasonable expectation that this would happen. It was reasonable for Mr and Mrs A not to take further action after they had contacted HMRC with the correct information twice.

Although we understood why the Adjudicator had decided that Mr and Mrs A's case did not meet the criteria for the overpayments to be written off under Code of Practice 26, we took the view that Mr and Mrs A had taken reasonable steps to avoid being overpaid, and that it was HMRC that had failed in its responsibility to record accurate and up to date information.

Putting it right

HMRC wrote off the overpayments totalling nearly £3,200 on Mr and Mrs A's tax credits award, and paid them compensation of £200 instead of the £50 recommended by the Adjudicator.