EXPLANATORY NOTE
(This note is not part of the Regulations)
The Government of the United Kingdom and the Government of Ireland entered into a Convention on Social Security, which was signed at Dublin on 1st February 2019 (“the Reciprocal Agreement”). The Reciprocal Agreement was made in the context of the UK’s exit from the European Union. Amongst other matters, the Reciprocal Agreement makes provision in relation to family benefits, which in the United Kingdom means Child Benefit, Guardian’s Allowance and child tax credit. The provisions relating to child tax credit are implemented domestically in these Regulations. These Regulations also make amendments to working tax credit rules to treat nationals of the United Kingdom or Ireland who are living in Ireland and working in the UK as meeting the residence requirements for that benefit.
These Regulations also make minor amendments to the Child Trust Funds Regulations 2004 (S.I. 2004/1450) consequential on the United Kingdom leaving the European Union in order to ensure their continued effective operation (regulations 11 to 13).
Regulation 3 amends the Tax Credits (Claims and Notifications) Regulations 2002 (S.I. 2002/2014) to provide that, in relation to a claim for child tax credit made by a person within scope of the Reciprocal Agreement, and where the United Kingdom is competent to pay this benefit, if that claim has been submitted to the Department of Employment Affairs and Social Protection in Ireland it will nevertheless be accepted by Her Majesty’s Revenue and Customs.
Regulation 5 amends the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002 (S.I. 2002/2008) by inserting new regulation 8A. This new regulation provides that where the United Kingdom is competent to pay family benefits but not by priority, child tax credit will be paid at the rate in accordance with the calculation set out in Article 39(4) of the Reciprocal Agreement. New regulation 8A also provides that child tax credit will be paid on a provisional basis where any of Article 39(5), 40(1)(b) or 63(2) of the Reciprocal Agreement apply.
Regulation 7 amends regulation 12 of the Tax Credits (Payments by the Commissioners) Regulations 2002 (S.I. 2002/2173) by inserting new paragraphs (5) to (8). Regulation 12(6) provides that where the United Kingdom ceases to be competent to pay family benefits by priority during a calendar month, Her Majesty’s Commissioners for Revenue and Customs will continue to make the payment for the remainder of that calendar month. New paragraph (8) contains definitions.
Regulation 9 makes two amendments to regulation 3 of the Tax Credits (Residence) Regulations 2003 (S.I. 2003/654). First, it substitutes paragraph (4) and inserts new paragraphs (4A) to (4C) which set out the circumstances in which a person shall be treated as being ordinarily resident in the United Kingdom for the purposes of working tax credit, which includes a person in a cross-border situation involving Ireland. Secondly, it inserts new paragraphs (7A) to (7D) which make provision in relation to persons within scope of the Reciprocal Agreement, in a cross-border situation involving Ireland, for the purposes of claiming child tax credit.
A full impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.
A Tax Information and Impact Note has not been produced for this instrument as it contains no substantive changes to tax policy.