Tax credits - requests for information

HMRC have powers to request information that underpin your claim for tax credits. If you fail to comply with their request you may find your tax credit payments are suspended.

To make matters worse there are no clear statutory rules about the type of records you should keep or how long they should be kept. It is likely therefore that in some cases you may not have the information HMRC requires.

You should also note that HMRC can charge a penalty of £300 and then daily penalties of £60 when they have issued a request and a complete reply has not been forthcoming. It is clear that these requests should not be ignored. Either send in the information you have or an explanation why you cannot comply.

The HMRC factsheet on this issue cites the following as a reasonable excuse for not sending in the information requested:

. Serious illness, or
. Documentation lost due to fire, flood or theft.

A final point, there are no present safeguards for taxpayers who have their tax credit payments suspended due to non-compliance with a request for information about their claim. This includes no right of appeal or provision for you to put forward a reasonable excuse and no time limit on how long the suspension can continue.