Part 1 Tax credits

General

1 Introductory

(1) This Act makes provision for—

(a) a tax credit to be known as child tax credit, and

(b) a tax credit to be known as working tax credit.

(2) In this Act references to a tax credit are to either of those tax credits and references to tax credits are to both of them.

(3) The following (which are superseded by tax credits) are abolished—

(a) children’s tax credit under section 257AA of the Income and Corporation Taxes Act 1988 (c. 1),

(b) working families' tax credit,

(c) disabled person’s tax credit,

(d) the amounts which, in relation to income support and income-based jobseeker’s allowance, are prescribed as part of the applicable amount in respect of a child or young person, the family premium, the enhanced disability premium in respect of a child or young person and the disabled child premium,

(e) increases in benefits in respect of children under sections 80 and 90 of the Social Security Contributions and Benefits Act 1992 (c. 4) and sections 80 and 90 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), and

(f) the employment credit under the schemes under section 2(2) of the Employment and Training Act 1973 (c. 50) and section 1 of the Employment and Training Act (Northern Ireland) 1950 (c. 29 (N.I.)) known as “New Deal 50plus”.

2 Functions of Board

(1) Tax credits are to be under the care and management of the Board.

(2) Section 10 of the Exchequer and Audit Departments Act 1866 (c. 39) (gross revenues to be paid to Exchequer) is to be construed as allowing the Board to deduct payments for or in respect of tax credits before causing the gross revenues of their department to be paid to the account mentioned in that section.

(3) For the purposes of the Inland Revenue Regulation Act 1890 (c. 21) the definition of “inland revenue” in section 39 of that Act is to be taken to include tax credits.

(4) The reference in section 4(1) of that Act (appointment of collectors, officers and other persons) to collecting, receiving, managing and accounting for inland revenue is to be taken to include a reference to paying and managing tax credits.

(5) The duties of the Board under section 13 of that Act (Board to keep accounts) are to include a duty to set forth in the accounts mentioned in that section—

(a) the amounts of the several payments made by them of or in respect of tax credits,

(b) the amounts of the expenses of paying and managing tax credits, and

(c) the amounts received by them in respect of tax credits,

distinguishing in each case between amounts relating to child tax credit and amounts relating to working tax credit.

(6) In any declaration for the purposes of section 6 of the Taxes Management Act 1970 (c. 9) (declarations on taking office), whether made before or after the commencement of this section, the reference to an offence relating to inland revenue is to be taken to include a reference to an offence relating to a tax credit.

3 Claims

(1) Entitlement to a tax credit for the whole or part of a tax year is dependent on the making of a claim for it.

(2) Where the Board—

(a) decide under section 14 not to make an award of a tax credit on a claim, or

(b) decide under section 16 to terminate an award of a tax credit made on a claim,

(subject to any appeal) any entitlement, or subsequent entitlement, to the tax credit for any part of the same tax year is dependent on the making of a new claim.

(3) A claim for a tax credit may be made—

(a) jointly by the members of a married couple or unmarried couple both of whom are aged at least sixteen and are in the United Kingdom, or

(b) by a person who is aged at least sixteen and is in the United Kingdom but is not entitled to make a claim under paragraph (a) (jointly with another).

(4) Entitlement to a tax credit pursuant to a claim ceases—

(a) in the case of a joint claim, if the persons by whom it was made could no longer jointly make a joint claim, and

(b) in the case of a single claim, if the person by whom it was made could no longer make a single claim.

(5) In this Part “married couple” means a man and woman who are married to each other and are neither—

(a) separated under a court order, nor

(b) separated in circumstances in which the separation is likely to be permanent.

(6) In this Part “unmarried couple” means a man and a woman who are not a married couple but are living together as husband and wife.

(7) Circumstances may be prescribed in which a person is to be treated for the purposes of this Part as being, or as not being, in the United Kingdom.

(8) In this Part—

• “joint claim” means a claim under paragraph (a) of subsection (3), and

• “single claim” means a claim under paragraph (b) of that subsection.

4 Claims: supplementary

(1) Regulations may—

(a) require a claim for a tax credit to be made in a prescribed manner and within a prescribed time,

(b) provide for a claim for a tax credit made in prescribed circumstances to be treated as having been made on a prescribed date earlier or later than that on which it is made,

(c) provide that, in prescribed circumstances, a claim for a tax credit may be made for a period wholly or partly after the date on which it is made,

(d) provide that, in prescribed circumstances, an award on a claim for a tax credit may be made subject to the condition that the requirements for entitlement are satisfied at a prescribed time,

(e) provide for a claim for a tax credit to be made or proceeded with in the name of a person who has died,

(f) provide that, in prescribed circumstances, one person may act for another in making a claim for a tax credit,

(g) provide that, in prescribed circumstances, a claim for a tax credit made by one member of a married couple or an unmarried couple is to be treated as also made by the other member of the married couple or unmarried couple, and

(h) provide that a claim for a tax credit is to be treated as made by a person or persons in such other circumstances as may be prescribed.

(2) The Board may supply to a person who has made a claim for a tax credit (whether or not jointly with another)—

(a) any information relating to the claim, to an award made on the claim or to any change of circumstances relevant to the claim or such an award,

(b) any communication made or received relating to such an award or any such change of circumstances, and

(c) any other information which is relevant to any entitlement to tax credits pursuant to the claim or any such change of circumstances or which appeared to be so relevant at the time the information was supplied.

5 Period of awards

(1) Where a tax credit is claimed for a tax year by making a claim before the tax year begins, any award of the tax credit on the claim is for the whole of the tax year.

(2) An award on any other claim for a tax credit is for the period beginning with the date on which the claim is made and ending at the end of the tax year in which that date falls.

(3) Subsections (1) and (2) are subject to any decision by the Board under section 16 to terminate an award.

6 Notifications of changes of circumstances

(1) Regulations may provide that any change of circumstances of a prescribed description which may increase the maximum rate at which a person or persons may be entitled to a tax credit is to do so only if notification of it has been given.

(2) Regulations under subsection (1) may—

(a) provide for notification of a change of circumstances given in prescribed circumstances to be treated as having been given on a prescribed date earlier or later than that on which it is given,

(b) provide that, in prescribed circumstances, a notification of a change of circumstances may be given for a period wholly or partly after the date on which it is given, and

(c) provide that, in prescribed circumstances, an amendment of an award of a tax credit in consequence of a notification of a change of circumstances may be made subject to the condition that the requirements for entitlement to the amended amount of the tax credit are satisfied at a prescribed time.

(3) Regulations may require that, where a person has or persons have claimed a tax credit, notification is to be given if there is a change of circumstances of a prescribed description which may decrease the rate at which he is or they are entitled to the tax credit or mean that he ceases or they cease to be entitled to the tax credit.

(4) Regulations under this section may—

(a) require a notification to be given in a prescribed manner and within a prescribed time,

(b) specify the person or persons by whom a notification may be, or is to be, given, and

(c) provide that, in prescribed circumstances, one person may act for another in giving a notification.

7 Income test

(1) The entitlement of a person or persons of any description to a tax credit is dependent on the relevant income—

(a) not exceeding the amount determined in the manner prescribed for the purposes of this paragraph in relation to the tax credit and a person or persons of that description (referred to in this Part as the income threshold), or

(b) exceeding the income threshold by only so much that a determination in accordance with regulations under section 13(2) provides a rate of the tax credit in his or their case.

(2) Subsection (1) does not apply in relation to the entitlement of a person or persons to a tax credit for so long as the person, or either of the persons, is entitled to any social security benefit prescribed for the purposes of this subsection in relation to the tax credit.

(3) In this Part “the relevant income” means—

(a) if an amount is prescribed for the purposes of this paragraph and the current year income exceeds the previous year income by not more than that amount, the previous year income,

(b) if an amount is prescribed for the purposes of this paragraph and the current year income exceeds the previous year income by more than that amount, the current year income reduced by that amount,

(c) if an amount is prescribed for the purposes of this paragraph and the previous year income exceeds the current year income by not more than that amount, the previous year income,

(d) if an amount is prescribed for the purposes of this paragraph and the previous year income exceeds the current year income by more than that amount, the current year income increased by that amount, and

(e) otherwise, the current year income.

(4) In this Part “the current year income” means—

(a) in relation to persons by whom a joint claim for a tax credit is made, the aggregate income of the persons for the tax year to which the claim relates, and

(b) in relation to a person by whom a single claim for a tax credit is made, the income of the person for that tax year.

(5) In this Part “the previous year income” means—

(a) in relation to persons by whom a joint claim for a tax credit is made, the aggregate income of the persons for the tax year preceding that to which the claim relates, and

(b) in relation to a person by whom a single claim for a tax credit is made, the income of the person for that preceding tax year.

(6) Regulations may provide that, for the purposes of this Part, income of a prescribed description is to be treated as being, or as not being, income for a particular tax year.

(7) In particular, regulations may provide that income of a prescribed description of a person for the tax year immediately before the preceding tax year referred to in subsection (5) is to be treated as being income of that preceding tax year (instead of any actual income of that description of the person for that preceding tax year).

(8) Regulations may for the purposes of this Part make provision—

(a) as to what is, or is not, income, and

(b) as to the calculation of income.

(9) Regulations may provide that, for the purposes of this Part, a person is to be treated—

(a) as having income which he does not in fact have, or

(b) as not having income which he does in fact have.

(10) The Board may estimate the amount of the income of a person, or the aggregate income of persons, for any tax year for the purpose of making, amending or terminating an award of a tax credit; but such an estimate does not affect the rate at which he is, or they are, entitled to the tax credit for that or any other tax year.

Child tax credit

8 Entitlement

(1) The entitlement of the person or persons by whom a claim for child tax credit has been made is dependent on him, or either or both of them, being responsible for one or more children or qualifying young persons.

(2) Regulations may make provision for the purposes of child tax credit as to the circumstances in which a person is or is not responsible for a child or qualifying young person.

(3) For the purposes of this Part a person is a child if he has not attained the age of sixteen; but regulations may make provision for a person who has attained that age to remain a child for the purposes of this Part after attaining that age for a prescribed period or until a prescribed date.

(4) In this Part “qualifying young person” means a person, other than a child, who—

(a) has not attained such age (greater than sixteen) as is prescribed, and

(b) satisfies prescribed conditions.

(5) Circumstances may be prescribed in which a person is to be entitled to child tax credit for a prescribed period in respect of a child or qualifying young person who has died.

9 Maximum rate

(1) The maximum rate at which a person or persons may be entitled to child tax credit is to be determined in the prescribed manner.

(2) The prescribed manner of determination must involve the inclusion of—

(a) an element which is to be included in the case of all persons entitled to child tax credit, and

(b) an element in respect of each child or qualifying young person for whom the person is, or either or both of them is or are, responsible.

(3) The element specified in paragraph (a) of subsection (2) is to be known as the family element of child tax credit and that specified in paragraph (b) of that subsection is to be known as the individual element of child tax credit.

(4) The prescribed manner of determination may involve the inclusion of such other elements as may be prescribed.

(5) The prescribed manner of determination—

(a) may include provision for the amount of the family element of child tax credit to vary according to the age of any of the children or qualifying young persons or according to any such other factors as may be prescribed,

(b) may include provision for the amount of the individual element of child tax credit to vary according to the age of the child or qualifying young person or according to any such other factors as may be prescribed, and

(c) must include provision for the amount of the individual element of child tax credit to be increased in the case of a child or qualifying young person who is disabled and to be further increased in the case of a child or qualifying young person who is severely disabled.

(6) A child or qualifying young person is disabled, or severely disabled, for the purposes of this section only if—

(a) he satisfies prescribed conditions, or

(b) prescribed conditions exist in relation to him.

(7) If, in accordance with regulations under section 8(2), more than one claimant may be entitled to child tax credit in respect of the same child or qualifying young person, the prescribed manner of determination may include provision for the amount of any element of child tax credit included in the case of any one or more of them to be less than it would be if only one claimant were so entitled.

(8) “Claimant” means—

(a) in the case of a single claim, the person who makes the claim, and

(b) in the case of a joint claim, the persons who make the claim.

Working tax credit

10 Entitlement

(1) The entitlement of the person or persons by whom a claim for working tax credit has been made is dependent on him, or either or both of them, being engaged in qualifying remunerative work.

(2) Regulations may for the purposes of this Part make provision—

(a) as to what is, or is not, qualifying remunerative work, and

(b) as to the circumstances in which a person is, or is not, engaged in it.

(3) The circumstances prescribed under subsection (2)(b) may differ by reference to—

(a) the age of the person or either of the persons,

(b) whether the person, or either of the persons, is disabled,

(c) whether the person, or either of the persons, is responsible for one or more children or qualifying young persons, or

(d) any other factors.

(4) Regulations may make provision for the purposes of working tax credit as to the circumstances in which a person is or is not responsible for a child or qualifying young person.

11 Maximum rate

(1) The maximum rate at which a person or persons may be entitled to working tax credit is to be determined in the prescribed manner.

(2) The prescribed manner of determination must involve the inclusion of an element which is to be included in the case of all persons entitled to working tax credit.

(3) The prescribed manner of determination must also involve the inclusion of an element in respect of the person, or either or both of the persons, engaged in qualifying remunerative work—

(a) having a physical or mental disability which puts him at a disadvantage in getting a job, and

(b) satisfying such other conditions as may be prescribed.

(4) The element specified in subsection (2) is to be known as the basic element of working tax credit and the element specified in subsection (3) is to be known as the disability element of working tax credit.

(5) The prescribed manner of determination may involve the inclusion of such other elements as may be prescribed.

(6) The other elements may (in particular) include—

(a) an element in respect of the person, or either of the persons or the two of them taken together, being engaged in qualifying remunerative work to an extent prescribed for the purposes of this paragraph,

(b) an element in respect of the persons being the members of a married couple or an unmarried couple,

(c) an element in respect of the person not being a member of a married couple or an unmarried couple but being responsible for a child or qualifying young person,

(d) an element in respect of the person, or either or both of the persons, being severely disabled, and

(e) an element in respect of the person, or either or both of the persons, being over a prescribed age, satisfying prescribed conditions and having been engaged in qualifying remunerative work for not longer than a prescribed period.

(7) A person has a physical or mental disability which puts him at a disadvantage in getting a job, or is severely disabled, for the purposes of this section only if—

(a) he satisfies prescribed conditions, or

(b) prescribed conditions exist in relation to him.

12 Child care element

(1) The prescribed manner of determination of the maximum rate at which a person or persons may be entitled to working tax credit may involve the inclusion, in prescribed circumstances, of a child care element.

(2) A child care element is an element in respect of a prescribed proportion of so much of any relevant child care charges as does not exceed a prescribed amount.

(3) “Child care charges” are charges of a prescribed description incurred in respect of child care by the person, or either or both of the persons, by whom a claim for working tax credit is made.

(4) “Child care”, in relation to a person or persons, means care provided—

(a) for a child of a prescribed description for whom the person is responsible, or for whom either or both of the persons is or are responsible, and

(b) by a person of a prescribed description.

(5) The descriptions of persons prescribed under subsection (4)(b) may include descriptions of persons approved in accordance with a scheme made by the appropriate national authority under this subsection.

(6) “The appropriate national authority” means—

(a) in relation to care provided in England, the Secretary of State,

(b) in relation to care provided in Scotland, the Scottish Ministers,

(c) in relation to care provided in Wales, the National Assembly for Wales, and

(d) in relation to care provided in Northern Ireland, the Department of Health, Social Services and Public Safety.

(7) The provision made by a scheme under subsection (5) must involve the giving of approvals, in accordance with criteria determined by or under the scheme, by such of the following as the scheme specifies—

(a) the appropriate national authority making the scheme,

(b) one or more specified persons or bodies or persons or bodies of a specified description, and

(c) persons or bodies accredited under the scheme in accordance with criteria determined by or under it.

(8) A scheme under subsection (5) may authorise—

(a) the making of grants or loans to, and

(b) the charging of reasonable fees by,

persons and bodies giving approvals.

Rate

13 Rate

(1) Where, in the case of a person or persons entitled to a tax credit, the relevant income does not exceed the income threshold (or his or their entitlement arises by virtue of section 7(2)), the rate at which he is or they are entitled to the tax credit is the maximum rate for his or their case.

(2) Regulations shall make provision as to the manner of determining the rate (if any) at which a person is, or persons are, entitled to a tax credit in any other case.

(3) The manner of determination prescribed under subsection (2)—

(a) may involve the making of adjustments so as to avoid fractional amounts, and

(b) may include provision for securing that, where the rate at which a person or persons would be entitled to a tax credit would be less than a prescribed rate, there is no rate in his or their case.

Decisions

14 Initial decisions

(1) On a claim for a tax credit the Board must decide—

(a) whether to make an award of the tax credit, and

(b) if so, the rate at which to award it.

(2) Before making their decision the Board may by notice—

(a) require the person, or either or both of the persons, by whom the claim is made to provide any information or evidence which the Board consider they may need for making their decision, or

(b) require any person of a prescribed description to provide any information or evidence of a prescribed description which the Board consider they may need for that purpose,

by the date specified in the notice.

(3) The Board’s power to decide the rate at which to award a tax credit includes power to decide to award it at a nil rate.

15 Revised decisions after notifications

(1) Where notification of a change of circumstances increasing the maximum rate at which a person or persons may be entitled to a tax credit is given in accordance with regulations under section 6(1), the Board must decide whether (and, if so, how) to amend the award of the tax credit made to him or them.

(2) Before making their decision the Board may by notice—

(a) require the person by whom the notification is given to provide any information or evidence which the Board consider they may need for making their decision, or

(b) require any person of a prescribed description to provide any information or evidence of a prescribed description which the Board consider they may need for that purpose,

by the date specified in the notice.

16 Other revised decisions

(1) Where, at any time during the period for which an award of a tax credit is made to a person or persons, the Board have reasonable grounds for believing—

(a) that the rate at which the tax credit has been awarded to him or them for the period differs from the rate at which he is, or they are, entitled to the tax credit for the period, or

(b) that he has, or they have, ceased to be, or never been, entitled to the tax credit for the period,

the Board may decide to amend or terminate the award.

(2) Where, at any time during the period for which an award of a tax credit is made to a person or persons, the Board believe—

(a) that the rate at which a tax credit has been awarded to him or them for the period may differ from the rate at which he is, or they are, entitled to it for the period, or

(b) that he or they may have ceased to be, or never been, entitled to the tax credit for the period,

the Board may give a notice under subsection (3).

(3) A notice under this subsection may—

(a) require the person, or either or both of the persons, to whom the tax credit was awarded to provide any information or evidence which the Board consider they may need for considering whether to amend or terminate the award under subsection (1), or

(b) require any person of a prescribed description to provide any information or evidence of a prescribed description which the Board consider they may need for that purpose,

by the date specified in the notice.

17 Final notice

(1) Where a tax credit has been awarded for the whole or part of a tax year—

(a) for awards made on single claims, the Board must give a notice relating to the tax year to the person to whom the tax credit was awarded, and

(b) for awards made on joint claims, the Board must give such a notice to the persons to whom the tax credit was awarded (with separate copies of the notice for each of them if the Board consider appropriate).

(2) The notice must either—

(a) require that the person or persons must, by the date specified for the purposes of this subsection, declare that the relevant circumstances were as specified or state any respects in which they were not, or

(b) inform the person or persons that he or they will be treated as having declared in response to the notice that the relevant circumstances were as specified unless, by that date, he states or they state any respects in which they were not.

(3) “Relevant circumstances” means circumstances (other than income) affecting—

(a) the entitlement of the person, or joint entitlement of the persons, to the tax credit, or

(b) the amount of the tax credit to which he was entitled, or they were jointly entitled,

for the tax year.

(4) The notice must either—

(a) require that the person or persons must, by the date specified for the purposes of this subsection, declare that the amount of the current year income or estimated current year income (depending on which is specified) was the amount, or fell within the range, specified or comply with subsection (5), or

(b) inform the person or persons that he or they will be treated as having declared in response to the notice that the amount of the current year income or estimated current year income (depending on which is specified) was the amount, or fell within the range, specified unless, by that date, he complies or they comply with subsection (5).

(5) To comply with this subsection the person or persons must either—

(a) state the current year income or his or their estimate of the current year income (making clear which), or

(b) declare that, throughout the period to which the award related, subsection (1) of section 7 did not apply to him or them by virtue of subsection (2) of that section.

(6) The notice may—

(a) require that the person or persons must, by the date specified for the purposes of subsection (4), declare that the amount of the previous year income was the amount, or fell within the range, specified or comply with subsection (7), or

(b) inform the person or persons that he or they will be treated as having declared in response to the notice that the amount of the previous year income was the amount, or fell within the range, specified unless, by that date, he complies or they comply with subsection (7).

(7) To comply with this subsection the person or persons must either—

(a) state the previous year income, or

(b) make the declaration specified in subsection (5)(b).

(8) The notice must inform the person or persons that if he or they—

(a) makes or make a declaration under paragraph (a) of subsection (4), or is or are treated as making a declaration under paragraph (b) of that subsection, in relation to estimated current year income (or the range within which estimated current year income fell), or

(b) states or state under subsection (5)(a) his or their estimate of the current year income,

he or they will be treated as having declared in response to the notice that the amount of the (actual) current year income was as estimated unless, by the date specified for the purposes of this subsection, he states or they state the current year income.

(9) “Specified”, in relation to a notice, means specified in the notice.

(10) Regulations may—

(a) provide that, in prescribed circumstances, one person may act for another in response to a notice under this section, and

(b) provide that, in prescribed circumstances, anything done by one member of a married couple or an unmarried couple in response to a notice given under this section is to be treated as also done by the other member of the married couple or unmarried couple.

18 Decisions after final notice

(1) After giving a notice under section 17 the Board must decide—

(a) whether the person was entitled, or the persons were jointly entitled, to the tax credit, and

(b) if so, the amount of the tax credit to which he was entitled, or they were jointly entitled,

for the tax year.

(2) But, subject to subsection (3), that decision must not be made before a declaration or statement has been made in response to the relevant provisions of the notice.

(3) If a declaration or statement has not been made in response to the relevant provisions of the notice on or before the date specified for the purposes of section 17(4), that decision may be made after that date.

(4) In subsections (2) and (3) “the relevant provisions of the notice” means—

(a) the provision included in the notice by virtue of subsection (2) of section 17,

(b) the provision included in the notice by virtue of subsection (4) of that section, and

(c) any provision included in the notice by virtue of subsection (6) of that section.

(5) Where the Board make a decision under subsection (1) on or before the date referred to in subsection (3), they may revise it if a new declaration or statement is made on or before that date.

(6) If the person or persons to whom a notice under section 17 is given is or are within paragraph (a) or (b) of subsection (8) of that section, the Board must decide again—

(a) whether the person was entitled, or the persons were jointly entitled, to the tax credit, and

(b) if so, the amount of the tax credit to which he was entitled, or they were jointly entitled,

for the tax year.

(7) But, subject to subsection (8), that decision must not be made before a statement has been made in response to the provision included in the notice by virtue of subsection (8) of section 17.

(8) If a statement has not been made in response to the provision included in the notice by virtue of that subsection on or before the date specified for the purposes of that subsection, that decision may be made after that date.

(9) Where the Board make a decision under subsection (6) on or before the date referred to in subsection (8), they may revise it if a new statement is made on or before that date.

(10) Before exercising a function imposed or conferred on them by subsection (1), (5), (6) or (9), the Board may by notice require the person, or either or both of the persons, to whom the notice under section 17 was given to provide any further information or evidence which the Board consider they may need for exercising the function by the date specified in the notice.

(11) Subject to sections 19 and 20 and regulations under section 21 (and to any revision under subsection (5) or (9) and any appeal)—

(a) in a case in which a decision is made under subsection (6) in relation to a person or persons and a tax credit for a tax year, that decision, and

(b) in any other case, the decision under subsection (1) in relation to a person or persons and a tax credit for a tax year,

is conclusive as to the entitlement of the person, or the joint entitlement of the persons, to the tax credit for the tax year and the amount of the tax credit to which he was entitled, or they were jointly entitled, for the tax year.

19 Power to enquire

(1) The Board may enquire into—

(a) the entitlement of a person, or the joint entitlement of persons, to a tax credit for a tax year, and

(b) the amount of the tax credit to which he was entitled, or they were jointly entitled, for the tax year,

if they give notice to the person, or each of the persons, during the period allowed for the initiation of an enquiry.

(2) As part of the enquiry the Board may by notice—

(a) require the person, or either or both of the persons, to provide any information or evidence which the Board consider they may need for the purposes of the enquiry, or

(b) require any person of a prescribed description to provide any information or evidence of a prescribed description which the Board consider they may need for those purposes,

by the date specified in the notice.

(3) On an enquiry the Board must decide—

(a) whether the person was entitled, or the persons were jointly entitled, to the tax credit, and

(b) if so, the amount of the tax credit to which he was entitled, or they were jointly entitled,

for the tax year.

(4) The period allowed for the initiation of an enquiry is the period beginning immediately after the relevant section 18 decision and ending—

(a) if the person, or either of the persons, to whom the enquiry relates is required by section 8 of the Taxes Management Act 1970 (c. 9) to make a return, with the day on which the return becomes final (or, if both of the persons are so required and their returns become final on different days, with the later of those days), or

(b) in any other case, one year after the beginning of the relevant section 17 date.

(5) “The relevant section 18 decision” means—

(a) in a case in which a decision must be made under subsection (6) of section 18 in relation to the person or persons and the tax year to which the enquiry relates, that decision, and

(b) in any other case, the decision under subsection (1) of that section in relation to the person or persons and that tax year.

(6) “The relevant section 17 date” means—

(a) in a case in which a statement may be made by the person or persons in response to provision included by virtue of subsection (8) of section 17 in the notice given to him or them under that section in relation to the tax year, the date specified in the notice for the purposes of that subsection, and

(b) in any other case, the date specified for the purposes of subsection (4) of that section in the notice given to him or them under that section in relation to the tax year.

(7) A return becomes final—

(a) if it is enquired into under section 9A of the Taxes Management Act 1970 (c. 9), when the enquiries are completed (within the meaning of section 28A of that Act), or

(b) otherwise, at the end of the period specified in subsection (2) of that section in relation to the return.

(8) An enquiry is completed at the time when the Board give notice to the person or persons of their decision under subsection (3); but if the Board give notice to the persons at different times the enquiry is completed at the later of those times.

(9) The person, or either of the persons, to whom the enquiry relates may at any time before such notice is given apply for a direction that the Board must give such a notice.

(10) Such an application is to be heard and determined in the same way as an appeal against a decision under subsection (3); and the General Commissioners or Special Commissioners hearing the application must give the direction applied for unless satisfied that the Board have reasonable grounds for not making the decision or giving the notice.

(11) Where the entitlement of a person, or the joint entitlement of persons, to a tax credit for a tax year has been enquired into under this section, it is not to be the subject of a further notice under subsection (1).

(12) Subject to section 20 and regulations under section 21 (and to any appeal), a decision under subsection (3) in relation to a person or persons and a tax credit for a tax year is conclusive as to the entitlement of the person, or the joint entitlement of the persons, to the tax credit for the tax year and the amount of the tax credit to which he was entitled, or they were jointly entitled, for the tax year.

20 Decisions on discovery

(1) Where in consequence of a person’s income tax liability being revised the Board have reasonable grounds for believing that a conclusive decision relating to his entitlement to a tax credit for a tax year (whether or not jointly with another person) is not correct, the Board may decide to revise that decision.

(2) A person’s income tax liability is revised—

(a) on the taking effect of an amendment of a return of his under section 9ZA(1) of the Taxes Management Act 1970,

(b) on the issue of a notice of correction under section 9ZB of that Act amending a return of his (provided that he does not give a notice of rejection before the end of the period of thirty days beginning with the date of issue of the notice of correction),

(c) on the amendment of an assessment of his by notice under section 9C of that Act,

(d) on the amendment of a return of his under section 12ABA(3)(a) of that Act,

(e) on the amendment of a return of his under subsection (6)(a) of section 12ABB of that Act after the correction of a partnership return under that section (provided that the amendment does not cease to have effect by reason of the rejection of the correction under subsection (4) of that section),

(f) on the issue of a closure notice under section 28A of that Act making amendments of a return of his,

(g) on the amendment of a return of his under section 28B(4)(a) of that Act,

(h) on the making of an assessment as regards him under section 29(1) of that Act,

(i) on the vacation of the whole or part of an assessment of his under section 32 of that Act,

(j) on giving him relief under section 33 of that Act, or

(k) on the determination (or settlement) of an appeal against the making, amendment or vacation of an assessment or return, or a decision on a claim for relief, under any of the provisions mentioned in paragraphs (c), (f) and (h) to (j).

(3) But no decision may be made under subsection (1)—

(a) unless it is too late to enquire into the person’s entitlement under section 19, or

(b) after the period of one year beginning when the person’s income tax liability is revised.

(4) Where the Board have reasonable grounds for believing that—

(a) a conclusive decision relating to the entitlement of a person, or the joint entitlement of persons, to a tax credit for a tax year is not correct, and

(b) that is attributable to fraud or neglect on the part of the person, or of either of the persons, or on the part of any person acting for him, or either of them,

the Board may decide to revise that decision.

(5) But no decision may be made under subsection (4)—

(a) unless it is too late to enquire into the entitlement, or joint entitlement, under section 19, or

(b) after the period of five years beginning with the end of the tax year to which the conclusive decision relates.

(6) “Conclusive decision”, in relation to the entitlement of a person, or joint entitlement of persons, to a tax credit for a tax year, means—

(a) a decision in relation to it under section 18(1), (5), (6) or (9) or 19(3) or a previous decision under this section, or

(b) a decision under regulations under section 21 relating to a decision within paragraph (a),

including a decision made on an appeal against such a decision.

(7) Subject to any subsequent decision under this section and to regulations under section 21 (and to any appeal), a decision under subsection (1) or (4) in relation to a person or persons and a tax credit for a tax year is conclusive as to the entitlement of the person, or the joint entitlement of the persons, to the tax credit for the tax year and the amount of the tax credit to which he was entitled, or they were jointly entitled, for the tax year.

21 Decisions subject to official error

Regulations may make provision for a decision under section 14(1), 15(1), 16(1), 18(1), (5), (6) or (9), 19(3) or 20(1) or (4) to be revised in favour of the person or persons to whom it relates if it is incorrect by reason of official error (as defined by the regulations).

22 Information etc. requirements: supplementary

(1) Regulations may make provision as to the manner and form in which—

(a) information or evidence is to be provided in compliance with a requirement imposed by a notice under section 14(2), 15(2), 16(3), 18(10) or 19(2), or

(b) a declaration or statement is to be made in response to a notice under section 17.

(2) Regulations may make provision as to the dates which may be specified in a notice under section 14(2), 15(2), 16(3), 17, 18(10) or 19(2).

23 Notice of decisions

(1) When a decision is made under section 14(1), 15(1), 16(1), 18(1), (5), (6) or (9), 19(3) or 20(1) or (4) or regulations under section 21, the Board must give notice of the decision to the person, or each of the persons, to whom it relates.

(2) Notice of a decision must state the date on which it is given and include details of any right to appeal against the decision under section 38.

(3) Notice need not be given of a decision made under section 14(1) or 18(1) or (6) on the basis of declarations made or treated as made by the person or persons in response to the notice given to him or them under section 17 if—

(a) that notice, or

(b) in the case of a decision under subsection (6) of section 18, that notice or the notice of the decision under subsection (1) of that section,

stated what the decision would be and the date on which it would be made.

Payment

24 Payments

(1) Where the Board have made an award of a tax credit, the amount of the tax credit awarded must be paid to the person to whom the award is made, subject to subsections (2) and (3).

(2) Where an award of a tax credit is made to the members of a married couple or an unmarried couple, payments of the tax credit, or of any element of the tax credit, are to be made to whichever of them is prescribed.

(3) Where an award of a tax credit is made on a claim which was made by one person on behalf of another, payments of the tax credit, or of any element of the tax credit, are to be made to whichever of those persons is prescribed.

(4) Where an award of a tax credit has been made to a person or persons for the whole or part of a tax year, payments may, in prescribed circumstances, continue to be made for any period, after the tax year, within which he is or they are entitled to make a claim for the tax credit for the next tax year.

(5) Payments made under subsection (4) are to be treated for the purposes of this section and the following provisions of this Part as if they were payments of the tax credit for the next tax year.

(6) Subject to section 25, payments of a tax credit must be made by the Board.

(7) Regulations may make provision about the time when and the manner in which a tax credit, or any element of a tax credit, is to be paid by the Board.

(8) If the regulations make provision for payments of a tax credit, or any element of a tax credit, to be made by the Board by way of a credit to a bank account or other account notified to the Board, the regulations may provide that entitlement to the tax credit or element is dependent on an account having been notified to the Board in accordance with the regulations.

25 Payments of working tax credit by employers

(1) Regulations may require employers, when making Schedule E payments and in any such other circumstances as may be prescribed, to pay working tax credit, or prescribed elements of working tax credit, to employees.

(2) The regulations may, in particular, include provision—

(a) requiring employers to make payments of working tax credit, or prescribed elements of working tax credit, in accordance with notices given to them