Backdating child tax credit for refugees

CPAG has issued proceedings in the High Court for a judicial review of HMRC’s refusal to accept a retrospective child tax credit (CTC) claim from a newly recognised refugee. Jessica Strode explains.

Under regulation 3(4)–(8) of the Tax Credits (Immigration) Regulations 2003 No.653 (the ‘Immigration Regs’) where a refugee (or a person granted leave under section 67 of the Immigration Act 2016) makes a claim for CTC within one month of receiving notification of her/his status, her/his CTC claim will be treated as made on the date s/he claimed asylum in the UK, and each subsequent April.

In CTC/3692/2008, it was held that all asylum support payments, including those for parents and children, must be deducted from any CTC due. In many cases, this has meant there has been no value in claiming CTC as it would be offset in full by the asylum support received.

However, in cases where the claimant has had multiple asylum claims before eventually having refugee status recognised, asylum support payments may not have been paid for the entire period from the first claim for asylum. In these cases, there may be significant financial value in making a claim, as CTC should be calculated for the entire period since that first asylum claim – ie, not the most recent successful claim.1FK v HMRC [2009] UKUT 134 (AAC) Note also that Section 4 support for those refused asylum is not offset from CTC.

Further, there should always be value for lone parents with two or more children or couples with five or more children (who are exempt from, or whose claims pre-date, the benefit cap) claiming CTC, as the value of the CTC due is higher than the value of any asylum support they may have received. CPAG is also considering whether there is scope to challenge the decision in CTC/3692/2008, so that, if successful, our challenge will also benefit those who would not currently benefit because of the level of asylum support deduction.

Whether it is possible make a claim for tax credits in order to receive this entitlement forms the basis of CPAG’s legal challenge.

HMRC relies on the argument that tax credits have, for new claimants, been abolished under the Welfare Reform Act 2012.2Except in specific circumstances, which are not relevant to this issue – eg, the SDP gateway. Claimants are specifically barred from making a new claim by article 7(1) of the Commencement No.23 Order, which prevents a claimant from making a claim to CTC in a universal credit (UC) full service area.3The Welfare Reform Act 2012 (Commencement No.23 and Transitional and Transitory Provisions) Order 2015 No.634 Since the roll out of UC is complete, HMRC says it is now not possible for newly recognised asylum seekers to make a claim for CTC, regardless of backdating provisions.

CPAG is arguing that CTC has not been abolished for all claims backdated to before the roll out of UC. Article 3 of the Commencement No.32 Order4The Welfare Reform Act 2012 (Commencement No.32 and Savings and Transitional Provisions) Order 2019 No.167 provides that repealing provisions, including section 33(1)(f) of the Welfare Reform Act 2012 which provides for the abolition of tax credits, shall ‘be treated as though they had not come into force’ in relation to ‘an award of tax credit that has effect for a period that includes 31 January 2019’ or ‘the case of an award of a tax credit that had effect for a period that ended on or before 30th January 2019’. Claims for CTC made by newly recognised refugees should be treated as having been made on the date asylum was first claimed; therefore these claimants are still able to claim CTC.

If we are successful, HMRC will need to accept CTC claims from refugees in this position. In the meantime, newly recognised refugees need to protect their position so that they can benefit from the success.

For updates and resources, see our website.

Step 1
Telephone the tax credits helpline (0345 300 3900) within one month of notification of your client’s refugee status and state ‘please treat this telephone call as a claim’. Provide your client’s national insurance number, or if one has not yet been allocated, confirm that an application has been made for one. Record the name of the person you speak to, the time and date. Note, it is not enough to phone to request a claim form.5CTC/644/2018

Step 2
When HMRC refuses, complete a claim form6Claim form for previous year available on our website and send it to HMRC by recorded delivery with a covering letter confirming the time, date and who you spoke to when your client claimed by telephone, and advise that the claim form is provided to ensure HMRC has all the information needed to calculate entitlement. Note, HMRC does not record telephone calls where it refuses to accept a claim, there is therefore no evidence of your client’s claim unless you confirm it in writing.

Step 3
Within one month of your client’s telephone call, seek in writing a mandatory reconsideration of the verbal decision not to award CTC (if you have received a decision in writing, you should challenge this at the same time). See CPAG’s website for a template mandatory reconsideration request you can use.

Step 4
When the decision is not changed on mandatory reconsideration (either by a mandatory reconsideration notice or by a refusal to provide a mandatory reconsideration notice), lodge an appeal. Contact CPAG at jrproject@cpag.org.uk for a template request to the tribunal that your client’s appeal to be heard without mandatory reconsideration notice.

Step 5
Once the appeal is accepted, if you have not done so already, contact CPAG at jrproject@cpag.org.uk and we will either confirm whether you should ask for your case to be stayed behind an appeal CPAG is also pursuing through the tribunal system, or provide you with a First-tier Tribunal template appeal submission you can use.
Following these steps should ensure that, if CPAG’s challenge is successful, your client will receive the CTC s/he is entitled to for the period s/he was waiting for an asylum decision.

We are looking for new clients with recent and clear-cut cases. Get in touch if you are contacted by anyone who:

If you become aware of any such new clients, please help them make the phone call to the helpline as in Step 1 including, crucially, to state ‘please treat this phone call as a claim’. Then immediately email CPAG at jrproject@cpag.org.uk.