The Tax Credits Act 2002 (Additional Payments Modification and Disapplication) Regulations 2022

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations are made in exercise of the powers in section 6(5), 6(6) and 10(1) of the Social Security (Additional Payments) Act 2022 (c. 38) (“SSAPA”). This is the first exercise of these powers. These Regulations modify the Tax Credit Act 2002 (c. 21) (“TCA 2002”) to create a distinct recovery mechanism for His Majesty’s Revenue and Customs (“HMRC”) to recover additional payments made under section 1(2) or 4(1) or (2) of SSAPA where it is determined that a person has received a payment of the additional payment, to which they were not entitled.

Regulation 1 provides for citation, commencement and interpretation. In addition, and made under section 6(6) of SSAPA, regulation 1 provides that regulations 2 to 6 will be applied retrospectively from 28 June 2022.

Regulation 3 disapplies sections 14 to 19, of the TCA 2002, in respect of additional payments paid to persons who are not entitled to the additional payment. As a consequence of this regulation such a person, from whom HMRC are seeking to recover an additional payment, will not be able to seek a mandatory review of the decision to recover the additional payment or to appeal that decision to the First-tier Tribunal.

Regulation 4 modifies section 20 of the TCA 2002, so as to apply that section to additional payments made under section 1(2) or 4(1) or (2) of SSAPA. By applying that section, additional payments may be recovered from recipients who are not entitled to those additional payments under SSAPA. A decision that an additional payment was incorrectly paid may only be made within five years, beginning with 6th April after the tax year in which the additional payment is made.

Regulation 5 modifies subsections (1), (2), (3) and (4) of section 28 of the TCA 2002 to include payments made under SSAPA. As a consequence of this modification, any additional payment which should not have been made becomes an overpayment, for the purposes of the TCA 2002, and can be recovered using the recovery methods specified in section 29 of the TCA 2002.

Regulation 6 modifies section 67 of the TCA 2002 to include a definition of additional payments.

A full impact statement has not been produced because no impact on the private, voluntary or public sector is foreseen.