Appendix
2
S.I. 2010/781:
memorandum from HMRC
Child Trust Funds (Amendment) Regulations 2011
(SI 2011/781)
1. The Joint Committee has requested a memorandum
to be submitted on the following point-
"Explain the meaning of 'unique identifier"
in the new regulation 33A(2A)(a) as inserted by regulation 4(b),
why it is not explained, and the purpose of the inclusion of the
expression."
2. Regulation 3 of the Child Trust
Funds (Amendment) Regulations 2011 ("the amending Regulations")
omits regulation 33 of the Child Trust Funds Regulations 2004
(SI 2004/1450) ("the principal Regulations") and regulation
4(b) of the amending Regulations inserts a new regulation 33A(2A)
into the principal Regulations. Regulation 33 of the principal
Regulations formed part of the original enactment of the principal
Regulations in 2004 and regulation 33A was inserted by the Child
Trust Funds (Amendment No. 2) Regulations 2004 (SI 2004/3382)
but with retrospective effect from 6 April 2005 when the child
trust funds regime first came into operation.
3. The unique identifier of the local authority
is a number generated by HMRC for tax purposes and allocated to
each local authority in the UK. It is used as an administrative
convenience for both the local authority and HMRC and has been
a feature of the principal Regulations since their origin in 2004.
The unique identifier is listed for every local authority, for
the purposes of the principal Regulations, in an annex to guidance
issued by HMRC to local authorities for the completion of monthly
returns to be made to HMRC as part of the child trust funds regime[1].
In order to assist in the understanding of the use of the term
in what is currently regulation 33A(2A) of the principal regulations,
it is considered useful to set out in some detail to the legislative
context of regulation 33A and the role of the local authority
in relation to child trust funds.
4. Regulation 33 of the principal
Regulations (prior to its omission) related to information which
was provided on a monthly basis by local authorities to HMRC in
relation to children who were "looked after" (in England,
Wales and Northern Ireland) or who are "looked after and
accommodated" (in Scotland) by a local authority. This information[2]
was required to ensure that HMRC could fulfil its obligations
imposed by section 6(1) and section 6(4)(b) of the Child Trust
Funds Act 2004 (2004 c.6) to apply for a child trust fund to be
opened for every looked after or looked after and accommodated
child.
5. Child trust funds opened by HMRC
for a looked after or a looked after and accommodated child, were,
where there was no-one, or no-one who was appropriate, with parental
responsibility for the child other than the local authority, subsequently
managed on the child's behalf by the Official Solicitor (or, in
Scotland, by the Accountant of Court).
6. Regulation 33A of the principal
Regulations sets out the conditions which were to be satisfied
for the Official Solicitor (or the Accountant of Court) to manage
child trust funds and imposed a duty on local authorities to identify
relevant children and deliver a form containing relevant information
in relation to the child to HMRC. HMRC would then pass on the
child's details to the Official Solicitor who would then assume
management of the child's child trust fund. The information to
be passed to HMRC for the purposes of regulation 33A was to form
part of the monthly return required to be delivered by local authorities
to HMRC under regulation 33 of the principal Regulations[3].
7. Section 1 of the Savings Accounts
and Health in Pregnancy Grant Act 2010 (2010 c. 36) ended eligibility
for child trust funds for children born after 2 January 2011.
Following the ending of child trust eligibility for children born
after 2 January 2011 it was considered inappropriate for local
authorities still to be required to make monthly returns of information
for looked after or looked after and accommodated children to
HMRC and so regulation 3 of the amending Regulations omitted regulation
33 from the principal Regulations.
8. However, so that the Official Solicitor
(or the Accountant of Court) could still assume the management
of child trust funds for certain categories of looked after or
looked after and accommodated children, local authorities are
still required to provide information relating to such children
eligible for a child trust fund to HMRC so that their details
could be passed on to the Official Solicitor (or the Accountant
of Court). However, as previously the information was included
in the monthly return made to HMRC by local authorities under
regulation 33 of the principal Regulations, it was, after the
omission of regulation 33, necessary to import the requirements
in relation to the report to be delivered to HMRC into regulation
33A, including the list of information required for each child,
as was previously contained in regulation 33(3) of the principal
Regulations.
9. New regulation 33A(1)(b)[4]
requires the local authority to deliver information to HMRC "in
a form specified by the Board containing the information specified
in paragraph (2A) for each child". The form specified
by the Board (HMRC) is form CTF15. Regulation 33A(2A) of the principal
Regulations amalgamates the information required to be delivered
by a local authority for every relevant child which was contained
in regulation 33(3) and regulation 33A(3)(a) of the principal
Regulations (as they existed prior to 7 April 2011) and repeats
in new sub-paragraph (2A)(a) of regulation 33A the information
which was required in relation to the relevant local authority
submitting the return as was contained in regulation 33(3)(a)
to (c), including the requirement for the return to state the
local authority's unique identifier.
10. Form CTF15, being the form specified
by the Board as that on which the local authority is required
to make a return under regulation 33A(1)(b) of the principal Regulations,
is accompanied by notes on the completion of that form which can
be found at www.hmrc.gov.uk/ctf/ctfnotes.pdf. The notes to CTF15
specify that the unique identifier, if unknown, can be found by
looking at further guidance issued by HMRC to local authorities
required to make a return to HMRC under regulation 33A of the
principal Regulations ("Guidance"). Every local authority's
unique identifier is listed in an annex to the Guidance.
11. The provision of the unique identifier
number by each local authority to HMRC as part of its return is
to provide administrative convenience to the local authority and
also to HMRC. In practice the local authority will send, as part
of its monthly return, one cover sheet (a form CTF15) containing
specific information and listing each child for whom a return
is made and then also, for each separate child so listed, another
form (a CTF15(child)) containing the information relevant to that
particular child. The CTF15(child) only contains the local authority's
unique identifier and no other details pertaining to the local
authority and so is easier for the local authority to complete
for each separate child without having to set out relevant information
pertaining to the local authority in full for each child separately.
12. In summary, therefore, when considering
the principal Regulations (which require a local authority to
make a return to HMRC of certain information on a form specified
by HMRC), the local authority will need to look at the form specified
by HMRC (the CTF15) and the notes and guidance issued by HMRC
for completion of the form. As mentioned, the Guidance makes clear
what the unique identifier is and also what the unique identifier
is for each authority.
13. Accordingly, it was considered
unnecessary to define the term "unique identifier" for
the purposes of the amendments to the principal Regulations made
by the amending Regulations. When the principal Regulations were
considered together with the form specified by HMRC for the purposes
of regulation 33A (the CTF15) and the accompanying notes and guidance,
it appeared clear as to what was meant by the "unique identifier"
for these purposes. The term has been used since 2004 without
amplification (see former regulation 33(3)(c)) and, as far as
HMRC is aware, local authorities have found no difficulty completing
the monthly returns required by the principal Regulations including
identifying and recording their unique identifier.
14. If, after consideration of the
above points, the Joint Committee considers that it would assist
readers if the principal Regulations defined the term "unique
identifier" or otherwise made reference to the Guidance issued
by HMRC, the least disruptive approach for achieving such clarification
would appear to be to make such provision as part of subsequent
regulations amending the principal Regulations. It is envisaged
that amendments to the principal Regulations will be required
to be made later this year.
HM Revenue & Customs
10 May 2011
1 Further more detailed information in relation to
the unique identifier is set out in paragraphs 10 to 12 below. Back
2
The information is listed in regulation 33(3) and includes at
sub-paragraph (c) "the unique identifier for the local authority". Back
3
Prior to 7 April 2011 and the coming into effect of the amending
Regulations, regulation 33A(1) of the principal Regulations which
provided:
"(1) Every local authority shall
be under a duty to-
(a) identify any child born after 31st
August 2002 and under 16, who falls within the circumstances specified
in paragraph (2) and, for each child,
(b) deliver a form (as part of the return
required by regulation 33(2) or (4), as the case may be) in accordance
with paragraph (3)(a).". Back
4
As substituted by regulation 4(a) of the amending Regulations. Back
| 
