All employers should receive final stop notices for all employees by the middle of February 2006. If a stop notice has not been received for an employee by 20 February 2006, employers should phone the Employer's Helpline (08457 143143) and provide details of the employee(s). The employer will then be contacted by telephone by the Tax Credit Office to agree a stop date, which will then be confirmed by an emergency stop notice.

If the employer's payroll schedule is such that the 20 February date would be too late to prevent final tax credit payments being made after 5 April, the employer should contact the Employer's Helpline earlier.

Under no circumstances should any tax credit payments be made to employees for any payment period after 31 March 2006, even if no stop notice has been received. From 1 April, HMRC will be making all payments direct on the basis that employers will have stopped making all payments by 31 March. Employers who find themselves having to follow these instructions should contact the Employer's Helpline to confirm that they have stopped making the payments.

If, for any reason, an employer makes a payment after 31 March 2006, the Employer's Helpline will explain how the money can be recovered. It will not be possible to reduce payments to the Accounts Office from 6 April as all 2006/07 paper and electronic forms will have had all references to tax credits removed.

Payroll software developers have been advised that, if their system still permits the payment of tax credits beyond 31 March 2006, it must be able to identify such payments separately and prevent them appearing on the system's P32 equivalent report.

...back to 15 December 2005

Sources:
Notes for Software Developers
Frequently Asked Questions

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HMRC and Electronic Data Systems (EDS) have negotiated a settlement of HMRC's claim for compensation for problems experienced with the IT system developed by EDS, to support the 2003 launch and subsequent operation of Tax Credits, during EDS's partnership with HMRC. EDS provided IT services to the Inland Revenue (now HMRC) under an outsourcing contract from 1994 to 2004.

The settlement amounts to £71.25 million, including an up-front payment and payments of additional amounts over time. HMRC believes this to be commensurate with EDS's responsibility for the IT problems which followed the launch of Tax Credits. The specific terms of the settlement agreement are confidential.

...back to 1 December 2005

Sources:
Settlement of dispute between HMRC and EDS

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