TAX CREDITS Citation, commencement and interpretation 1 1 These Regulations may be cited as the Tax Credits (Miscellaneous Amendments) Regulations 2004, shall come into force on 6th April 2004. 2 In these Regulations— “the Child Tax Credit Regulations ” means the Child Tax Credit Regulations 2002 ; “the Claims Regulations ” means the Tax Credits (Claims and Notifications) Regulations 2002 ; “the Income Regulations ” means the Tax Credits (Definition and Calculation of Income) Regulations 2002 ; “the Payment by Employers Regulations ” means the Working Tax Credit (Payment by Employers) Regulations 2002 ; “the Payments by the Board Regulations ” means the Tax Credits (Payments by the Board) Regulations 2002 ; “the Polygamous Marriages Regulations ” means the Tax Credits (Polygamous Marriages) Regulations 2003 ; “the Working Tax Credit Entitlement Regulations ” means the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 . Amendment of the Child Tax Credit Regulations 2 1 The Child Tax Credit Regulations are amended as follows. 2 In regulation 3(1) (circumstances in which a person is not responsible for a child or qualifying young person ) after Case D insert— Case E The child (having attained the age of sixteen) or the qualifying young person, claims incapacity benefit in his or her own right and that benefit is paid to or in respect of him or her for that period. This Case does not apply at any time (“the later time”) during a period of incapacity for work which began before 6th April 2004 in the case of a person in respect of whom, at a time— during that period of incapacity, and before that date, both incapacity benefit and child tax credit were payable, if child tax credit has been payable in respect of him or her continuously since 5th April 2004 until that later time. For the purposes of this Case “period of incapacity” shall be construed in accordance with section 30C of the 1992 Act (incapacity benefit: days and periods of incapacity for work) but disregarding subsections (5) and (5A) of that section. . Amendment of the Claims Regulations 3 1 The Claims Regulations are amended as follows. 2 In regulation 11 (circumstances in which a claim is to be treated as being made — notices containing provision under section 17 of the Act )— a for paragraph (3)(a) substitute— a in a case where the declaration is made by 30th September next following the end of the tax year to which the claim relates, on 6th April preceding that date; aa in a case where the declaration, not having been made by the date mentioned in sub-paragraph (a), is made before 31st January next following the end of the tax year to which the claim relates, and, in the opinion of the Board, the claimant had good cause for not making the declaration as mentioned in that sub-paragraph, on 6th April preceding the date on which the declaration is made; ; and b at the end of the regulation add— 4 Paragraph (3) does not apply— a in the case where there has been a previous single claim (to which the notice referred to in paragraph (2) relates) if the person by whom it was made could no longer make a single claim; or b in the case where there has been a previous joint claim (to which the notice referred to in paragraph (2) relates) if the persons by whom it was made could no longer make a joint claim. . 3 In regulation 24(1) (amended notifications) for “25 and 26” substitute “25, 26 and 26A”. 4 After regulation 26 insert— Date of notification — disability element and severe disability element for child tax credit 26A 1 In the circumstances prescribed by either paragraph (2) or (3), the notification of a change of circumstances referred to in sub-paragraph (f) of either of those paragraphs is to be treated as having been given on the date specified by paragraph (4). 2 The circumstances prescribed by this paragraph are where— a a claim for child tax credit including the disability element, the severe disability element or both those elements (“the original claim”) was made by a person or persons in respect of a child; b on the original claim the decision of the Board under section 14(1) of the Act was not to award the credit, or to award it without one or both of those elements; c the reason for that decision was that the person or the persons were not entitled to the element because the child did not satisfy regulation 8(2) or (3), as the case may be, of the Child Tax Credit Regulations 2002; d at the relevant date in relation to the original claim, the person or any of the persons had made a claim for a disability living allowance in respect of that child (“the other claim”) and the other claim had not been determined; e after that date, the other claim was determined in favour of the person by whom it was made; and f notice is given of the change of circumstances which results in the person or any of the persons becoming entitled to that element or those elements, as the case may be, within three months of the date that the other claim was determined. 3 The circumstances prescribed by this paragraph are where— a a notification was given of a change of circumstances which might result in the person or any of the persons by whom the claim was made becoming entitled to the disability element or the severe disability element of child tax credit (“the original notification”); b on the notification, the decision of the Board under section 15(1) of the Act was not to amend the award of the tax credit made to him or them; c the reason for that decision was that the person or any of the persons was not entitled to the element because regulation 8(2) or (3), as the case may be, of the Child Tax Credit Regulations 2002 was not satisfied in respect of the child in relation to whom the claim was made; d at the notification date in relation to the original notification, the person or either of the persons had made, in respect of the child, a claim that had not been determined for a disability living allowance (“the other claim”); e after that date, the other claim was determined in favour of the person by whom it was made; and f a further notification of the change of circumstances is given by the person or any of the persons, within three months of the date that the other claim was determined. 4 The date prescribed by this paragraph is— a the first date in respect of which the disability living allowance is payable; or b if later, the date on which— i in the circumstances prescribed by paragraph (2), the original claim was made (or treated as made under regulation 7); or ii in the circumstances prescribed by paragraph (3), the original notification was given (or treated as given under regulation 25). . 5 For regulations 33 and 34 substitute— Dates to be specified in notices under section 17 of the Act 33 In a notice under section 17 of the Act— a the date which may be specified for the purposes of subsection (2) or subsection (4) shall be not later than 30th September following the end of the tax year to which the notice relates, or 30 days after the date on which the notice is given, if later; and b the date which may be specified for the purposes of subsection (8) shall be not later than 31st January following the end of the tax year to which the notice relates, or 30 days after the date on which the notice is given, if later. Manner in which declaration or statement in response to a notice under section 17 of the Act to be made 34 1 This regulation prescribes the manner in which a declaration or statement in response to a notice under section 17 of the Act must be made. 2 A declaration or statement must be made— a in writing in a form approved by the Board for that purpose; b orally to an officer of the Board; or c in such other manner as the Board may accept as sufficient in the circumstances of any particular case. 3 In a case falling within paragraph (2)(b) one of two joint claimants may act for both of them in response to a notice under section 17 if, at the time the declaration or statement is made, a joint claim could be made by both of them. . Amendment of the Working Tax Credit Entitlement Regulations 4 The Working Tax Credit Entitlement Regulations are amended as follows. 5 1 Amend regulation 4 (entitlement to basic element of working tax credit: qualifying remunerative work) as follows. 2 At the end of paragraph (2) add— This is subject to the following qualification. . 3 After paragraph (2) insert— 2A Neither sub-paragraph (c) nor sub-paragraph (d) of paragraph (2) applies if— a in a case falling within sub-paragraph (c), the training allowance, or b in a case falling within sub-paragraph (d), any payment made by the Secretary of State, or, in Northern Ireland, by the Department for Social Development, in connection with the Intensive Activity Period, is chargeable to income tax as the profits of a trade, profession or vocation. . 6 In the heading to regulation 5 (time off in connection with maternity, paternity and adoption) for “maternity, paternity” substitute “childbirth”. 7 After regulation 5 insert— Time off in connection with childbirth and placement for adoption: further provisions 5A 1 This regulation applies to a person for any period— a which falls within a period to which regulation 5 applies; and b which follows the birth or the placement for adoption of the child in connection with whose birth or placement entitlement to the allowance, pay or leave mentioned in regulation 5(1) arises. 2 A person who was undertaking qualifying remunerative work for at least 16 hours per week, immediately before the beginning of a period to which regulation 5 applies, shall be treated as satisfying the requirements of regulation 4(1) during the period mentioned in paragraph (1) above. 3 Paragraph (4) of regulation 5 applies for the purpose of this regulation as it applies for the purpose of that regulation. . 8 In regulation 9B (training for work, etc. ) for “these Regulations” substitute “regulation 9” 9 Omit regulation 13(3) (entitlement to child care element of working tax credit). 10 In regulation 14 (relevant child care charges)— a in paragraph (1) after “responsible” insert “within the meaning of regulation 3 of the Child Tax Credit Regulations 2002”, and b omit paragraph (7). 11 1 Amend regulation 18 (50 plus element) as follows. 2 After paragraph (4) insert— 4A For the purposes of paragraph (4)(b) “consecutive periods” are periods, any pair of which is separated by a gap of not more than 12 weeks. . 3 In paragraph (5)— a at the end of sub-paragraph (d) omit “or”; b in sub-paragraph (e) for “the minimum income guarantee” onwards substitute “state pension credit within the meaning of the State Pension Credit Act 2002 ; or”; and c at the end add— f a training allowance paid by the Secretary of State under section 2(1) of the Employment and Training Act 1973 to a person in his capacity as a participant in either of the schemes provided by, or under arrangements made with, the Secretary of State and known as “Work-Based Learning for Adults” and “Training for Work”. . Amendment of the Income Regulations 12 The Income Regulations are amended as follows. 13 In regulation 2(1) (interpretation)— a at the end of the definition of “the Contributions and Benefits Act ” omit “and”; and b after “Employment and Training Act 1973” add— ; and “the Northern Ireland Contributions and Benefits Act” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992 . 14 1 Amend regulation 4 (employment income) as follows. 2 After paragraph (2) insert— 2A Paragraph (2B) applies if a claimant is a member of the Brigade of Gurkhas, to whom the voluntary settlement of tax liabilities of certain members of those units between the Ministry of Defence and the Board (“the voluntary settlement”) applies. 2B In the case of a claimant to whom this paragraph applies, the amount of his employment income from that employment for a particular tax year shall be the amount published by the Ministry of Defence as the UK equivalent rate in his case. . 3 In Table 1 in paragraph (4) (sums disregarded in the calculation of employment income)— a in item 12 (payments under staff suggestion schemes) after”322 of ITEPA ” insert “are satisfied”; b for item 16 (disregard for sums paid by the Department for Work and Pensions under section 2 of the Employment Act) substitute— 16 A payment made by the Department for Work and Pensions under section 2 of the Employment Act— a by way of In-Work Credit, Job Grant or Return to Work Credit, or b under the Employment Retention and Advancement Scheme or the Working Neighbourhoods Pilot . 15 At the end of regulation 16 (claimant treated as having income for which he could apply) add— 3 Paragraph (1) also does not apply to income by way of— a a Category A or Category B retirement pension, b a graduated retirement benefit, or c a shared additional pension, payment of which has been deferred. Here— “Category A retirement pension” means a pension to which a person is entitled by virtue of section 44 of the Contributions and Benefits Act or the Northern Ireland Contributions and Benefits Act ; “Category B retirement pension” means a pension to which a person is entitled by virtue of any of sections 48A to 48C of the Contributions and Benefits Act or sections 48A to 48C of the Northern Ireland Contributions and Benefits Act ; “graduated retirement benefit” means a pension payable under— sections 36 and 37 of the National Insurance Act 1965 ; or sections 35 and 36 of the National Insurance Act (Northern Ireland) 1966 ; and “shared additional pension” means a pension to which a person is entitled by virtue of section 55A of the Contributions and Benefits Act or section 55A of the Northern Ireland Contributions and Benefits Act . . 16 1 Amend regulation 19 (general disregards in the calculation of income) as follows. 2 In Table 6 (sums disregarded in the calculation of income)— a in item 3 (mandatory top up payments under the New Deal)— i in paragraph (a) after “Employment Act” insert “or section 1 of the Employment and Training Act (Northern Ireland) 1950”; and ii at the end of the item add— This item applies only to the extent that the payment is not taxable as a profit of a trade, profession or vocation. ; b omit item 7 (monies accumulated to assist in pursuit of self-employment); and c in item 11 (payments in respect of adoption or maintenance of children) after paragraph (b) insert— bb by a local authority by way of special guardianship support services pursuant to regulations under section 14F(1)(b) of the Children Act 1989 ; or . 3 In Table 7 (sums disregarded in calculating income if conditions are satisfied)— a in the heading to the second column for “Condition” substitute “Conditions”; and b at the end of the entry in the second column in respect of item 2 (disregard of certain training payments) add— The payment is not taxable as a profit of a trade, profession or vocation. . Amendment of the Payment by Employers Regulations 17 1 Amend the Payment by Employers Regulations as follows. 2 In regulation 2 (interpretation) — a omit the definition of “the Employments Regulations”; and b after “ PAYE income” insert— “the PAYE Regulations ” means the Income Tax (Pay as You Earn) Regulations 2003 ; . 3 In regulation 3(2) (exception from the definition of “relevant employer”) for “regulation 20 of the Employments Regulations” substitute “regulation 34 of the PAYE Regulations”. 4 In regulation 6 (relevant employer’s obligations to pay working tax credit)— a in paragraph (6) for “regulation 38 of the Employments Regulations” substitute “regulation 66 of the PAYE Regulations”; b in paragraph (7) for “regulation 39 of the Employments Regulations” substitute “regulation 67 of the PAYE Regulations”; c in paragraph (8) for “regulation 43 of the Employments Regulations” substitute “regulation 73 of the PAYE Regulations”; and d in paragraph (9) for “paragraph (2) of regulation 43 of the Employments Regulations” substitute “paragraph (4) of regulation 73 of the PAYE Regulations”. 5 In regulation 8(13) (rate of interest applicable on payments made to an employer by the Board) omit “or, as the case may be, section 826”. Amendment of the Tax Credits (Payments by the Board) Regulations 2002 18 In the Tax Credits (Payments by the Board) Regulations 2002 after regulation 12 of insert— Recovery of overpayments of tax credit from other payments of tax credit 12A 1 This regulation applies where notice is given to a person or persons under subsection (4) of section 29 of the Act (deduction of overpayments from payments of tax credit). 2 The maximum rate at which an overpayment may be recovered from payments of tax credit is— a where the only amount of tax credit to which the person is, or, in the case of a joint claim, the persons are, entitled, is the family element of child tax credit, 100% of that tax credit; b where the total amount of tax credit to which the person is, or, in the case of a joint claim, the persons are, entitled is not subject to reduction— i by virtue of section 7(2) of the Act; or ii because their income for the relevant year does not exceed the relevant income threshold prescribed in his or their case in regulation 3 of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002; 10% of that tax credit; and c in any other case, 25% of the tax credit to which the person is, or in the case of a joint claim, the persons are, entitled. 3 In paragraph (2) a reference to the amount to which a person is, or persons are, entitled is a reference to the amount to which they would be entitled but for the operation of that paragraph. . Amendment of the Polygamous Marriages Regulations 19 After regulation 47 insert— 47A In regulation 34(3)— a for “one of two joint claimants” substitute “any member of a polygamous unit”; and b for “both” (in each place where it occurs) substitute “all”. . Nick Ainger Jim Murphy Two of the Lords Commissioners of Her Majesty’s Treasury 15th March 2004 Ann Chant Dave Hartnett Two of the Commissioners of Inland Revenue 11th March 2004