HMRC did not reinstate tax credits
15. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the organisation has got something wrong. We do this by comparing what should have happened with what did happen. We have done this and have not found any indications HMRC got things wrong.
16. Prior to March 2020, Mrs C told us she was self-employed and receiving tax credits. She said she applied for UC out of necessity at the start of the COVID-19 pandemic when restrictions meant she could no longer work.
17. She said she stopped her UC claim in April 2021 as she was able to work again. She said she received notice from HMRC in September 2021 it was stopping her tax credits, and she was not eligible to re-apply. She said she complained to HMRC. She said it should reinstate her tax credits. She said she believes it is unlawful for HMRC to deny her tax credits.
18. In HMRC’s first-tier complaint response, it said tax credits are tax-free state benefits for people on low income which were being replaced by UC and were not a tax allowance. It said as tax credits were being phased out, it was no longer accepting new claims.
19. In its second-tier complaint response, it said her tax credits claim ended because she submitted a claim for UC on 20 March 2020. It said the Welfare Reform Act 2012 confirmed tax credits were to be abolished.
20. It said when a person submits a claim online for UC, they receive a warning message explaining if they are receiving tax credits, they will immediately end and they will not be able to reapply. It said Mrs C would have received this message when she submitted her claim for UC.
21. It said tax credits were being phased out and HMRC were no longer accepting new claims because UC was available in all parts of the UK.
22. We cannot see indications HMRC got things wrong. UC regulations, section 7 and 8, set out rules for the termination of tax credits when a UC claim is made. This is the legal basis for automatically ending tax credit awards when a UC claim is made.
23. Regulation 8 says when a person makes a UC claim, all awards of a tax credit will terminate on the day before the date the UC claim was made.
24. The Welfare Reform Act 2012 established UC and prevented new claims for historic benefits including tax credits. The Act introduced the following:
• plans for UC rollout across the country • stopping people being entitled to historic benefits including tax credits in those areas • stopping people being able to make new claims for tax credits when UC was available.
25. The UC rollout was done postcode by postcode across the country under UC regulations. These regulations:
• stopped people being entitled to tax credits in areas where UC was active • stopped people being able to make new claims when UC was available.
26. HMRC confirmed to us the rollout for UC for Mrs C’s postcode area was completed on 5 September 2018. This meant anybody living in her area would not have been able to make a new tax credit claim after that date.
27. Therefore, we do not see any indications of failings as HMRC acted within the relevant legislation and guidance when it ended Mrs C’s tax credits on 19 March 2020, and when it did not reinstate her tax credits later.
28. We understand Mrs C and her son went through a great deal of distress and financial challenges and recognise this decision may be difficult for Mrs C. We hope our explanation demonstrates we have reached this decision following careful consideration.
DWP’s communication about UC and tax credits
29. We saw Mrs C first complained to her MP about her tax credits on 8 November 2022. She said she was told to go through the local resolution with HMRC and DWP first.
30. She then complained to her MP about her tax credits on 22 July 2024. She said they had been stopped, she could not go back on tax credits, and she asked her MP to reinstate them. She referred to correspondence she previously had with HMRC on the matter. Her MP’s office forwarded this complaint to DWP the following day.
31. DWP replied on 20 August 2024. It noted Mrs C outlined concerns about her UC entitlement, the transition from tax credits, and her lack of eligibility for cost-of-living payments. DWP said as these concerns related to policy and the decision made on her case, this correspondence was not treated as a complaint under DWP’s complaints procedure.
32. It said her being dissatisfied with a decision, or with the policy behind the decision, did not constitute a complaint. Instead, it advised her the appropriate route would have been a mandatory reconsideration and appealing the decision about her eligibility for benefits through the tribunal process.
33. We did not see Mrs C raised a complaint to DWP about its staff not giving her information regarding how a UC claim may impact her tax credits. Therefore, DWP gave no response about this at the time.
34. When we contacted DWP about Mrs C’s complaint in February 2026, it explained it closed her UC claim on 26 October 2022 (effective from 20 October 2022). She did not accept her Claimant Commitment (a commitment that forms terms a claimant needs to agree to in exchange for getting their benefits).
35. DWP said she also informed its staff she wished to close her claim due to disagreement with the commitments. It said Mrs C made no further claim for UC after this date.
36. DWP added the records from her local job centre relating to her appointments on her benefit claims no longer exist. DWP’s document retention guidance allowed for documentation to be held by DWP for 14 months only. This meant it could not comment on what information staff gave Mrs C in March 2020, and whether they provided the information DWP would expect.
37. This means we cannot see DWP accept, as Mrs C alleges, its staff failed to give her information they should have. We also see the records that may help us reconcile this uncertainty no longer exist. As the events are so long ago, even if we or DWP could identify the staff Mrs C may have spoken to, we cannot see they could now provide a reliable account about what information they gave her, or not, concerning her tax credits.
38. Given DWP have deleted records in line with DWP’s document retention guidance, we cannot be critical these records no longer exist. It is not through any failing at DWP we lack records to inform our conclusions on this matter.
39. Given the lack of documentary evidence, we cannot see we can reach a satisfactory conclusion on what happened and whether DWP got things wrong regarding the information it gave Mrs C. For this reason, we cannot see further investigation will be practical, and we have decided not to consider this matter further.
40. We want to thank Mrs C for bringing her complaint to us and we hope our explanation provides Mrs C some reassurance on what happened, and we have reached this decision following careful consideration.