Claiming tax credits? HMRC is watching closely

Over the past year, HMRC has launched a high-profile series of investigations into those claiming tax credits. In particular, they have been stirring the murky waters that differentiate couples and single people.

If you are claiming tax credits, now could be a good time for you to make certain that your claim has been made correctly. There are plenty of ambiguities in the rules, and if anything is not right, it is far better that you find out for yourself before the investigators come knocking at your door.

Single or couple?

This is the most fundamental question, but in today’s world, it is not always so easy to answer. If you are married and living with your spouse, that’s easy enough. The same applies if you are not in a relationship and are bringing up the kids alone.

But what about if you have recently started a new relationship and your partner has, over time, pretty much moved in? You’re not married, the house is in your name and you still pay all the bills. But are you still single, or should you notify that you are now part of a couple?

According to HMRC rules, a “couple” is any of the following:

  • A man and woman who are married and not separated.
  • A man and woman who are living together as husband and wife.
  • A same sex couple who are either in a civil partnership or living together as if they were in a civil partnership.

So in our example above, you would be considered a couple, as in the eyes of HMRC, you are living together as husband and wife.

Getting it right

There are lots of people who fall foul of HMRC for making a false claim. Sure, there are some who do so intentionally in an attempt to defraud the tax office, but these are in the significant minority. Most are simply unaware of HMRC’s definitions and do not describe their relationship in the correctly defined terms.

Making what is effectively a fraudulent claim has two consequences. The first is that any payment being made will immediately stop. You can try to get it restarted, but the claim will immediately be escalated for evaluation, and in all likelihood, will be rejected for the same reasons.

In addition, HMRC will demand that you repay any and all money that has been falsely awarded, and might also impose additional penalties. In some cases, this can result in those who are already struggling to make ends meet trying to find thousands of pounds.

Are you affected?

If you have read through the above and now have a sinking feeling in your stomach, the first piece of advice is not to panic. The good news is that in the wake of the Concentrix scandal, HMRC has had plenty of bridge-building to do, and is attempting to show its “human” side. This means the broad policy of HMRC is to exercise some leniency and not to impose additional penalties in cases where the failure to report is clearly down to an oversight or misunderstanding.

The second piece of advice is to get help. Bodies like HMRC and the DWP are not easy to deal with, and if you are under investigation, you need professional assistance. At Hylton Potts, we have helped countless people to come through investigations like these, and in most cases, we will be able to handle all the interview and so on for you.

Tax credits are not the easiest things to get your head around at the best of times, so whether you’ve received a worrying letter, had a phone call or been asked to attend an interview, give us a call on 020 7381 8111, or email us at and a member of our team we will be happy to help.

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