Underpayments of disability element of child tax credit

KI v HMRC (TC) [2023] UKUT 212 (AAC)

This is a challenge in the Upper Tribunal to HMRC's refusal to backdate payments of the disability element of child tax credit (CTC), following underpayments of benefit prior to April 2016. The Upper Tribunal dismissed the appeal on 23 August 2023.

Read the judgment here

Background

Following a data match with DWP, HMRC discovered that 28,000 families, subsequently revised to 33,000, had not been receiving the disability element of CTC to which they were entitled. While this issue might have been going on since 2011, HMRC was only prepared to backdate the child element to April 2016.

Prior to the abolition of tax credits in April 2025, HMRC relied on a data feed from DWP to identify those eligible for the higher level of CTC.

Legal issues

The appellant KI, represented by CPAG, challenged HMRC's refusal to backdate her CTC disability element to earlier than April 2016, on the basis that the underpayments were caused by official error. In particular, KI contended that the failure of an automatic information-sharing system between the DWP and HMRC led to HMRC not being aware of KI's award of DLA, and this failure amounted to an official error.

The Upper Tribunal dismissed KI's appeal on 23 August 2023. It found that the First-tier Tribunal was right to decide that in the absence of a legal duty to share information between HMRC and DWP, the lack of information-sharing between them did not amount to an official error. Further, in the circumstances of KI's case, had there been an official error, it was one to which KI had contributed by failing to notify HMRC of her child's DLA award.