Tax Credits Act 2002 section 20

Decisions on discovery

Section 20 allows HMRC to revise a finalised tax credit decision where a person's income tax liability changes or where fraud or neglect is discovered, subject to specific time limits.

• HMRC may revise a finalised tax credit decision if a person's income tax liability is revised and there are reasonable grounds to believe the original tax credit decision was incorrect — but only within one year of the income tax revision and only if it is too late to open an enquiry under section 19.
• A person's income tax liability is treated as revised when certain events occur under the Taxes Management Act 1970, including amendments to self-assessment returns, HMRC corrections, closure notices following enquiries, discovery assessments, relief for overpaid tax, and appeal determinations.
• Where HMRC have reasonable grounds to believe a finalised tax credit decision is incorrect due to fraud or neglect by the claimant (or their agent), they may revise that decision — but only within five years from the end of the relevant tax year and only if it is too late to open an enquiry under section 19.
• A revised decision under this section is conclusive as to the claimant's entitlement and the amount of tax credit for the year, subject to further revision, official error correction, statutory review, or appeal.

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