Third of tax credit claimants need to renew by 31 July deadline

HMRC is urging taxpayers to renew tax credits as there are just six days to go before the 31 July 2019 deadline, otherwise payments will stop

A third of those eligible for working tax and child tax credits have not renewed their applications for the next year.

As of 24 July, HMRC said that 760,000 people still needed to renew before the deadline or lose their payments. So far this year 1,301,072 taxpayers have renewed their tax credits. 

Last year 274,981 people missed the deadline and had their payments stopped or altered as they missed the deadline to inform HMRC of changes to their circumstances.

Recipients need to check their renewal pack and advise HMRC of any changes of circumstances as part of the renewal process as soon as possible, including details on the claimant and their partner’s total income for the last tax year (6 April 2018 to 5 April 2019).

Failure to renew before the deadline will mean payments are stopped and any overpayments received since April 2019 will have to be repaid. HMRC is not taking any new claimants for tax credits as the system is being moved to universal credit. Working tax credits are paid to people working over 16 hours a week with a cap on total earnings.

Jane Booth, tax adviser at the Low Incomes Tax Reform Group (LITRG) said: ‘It is important you take any action necessary as soon as possible so that HMRC know how much to pay you for the rest of the year. Even if you are no longer entitled to tax credits, if you have received a renewal pack from HMRC you must still follow the instructions in it so HMRC can finalise your 2018/19 award.

‘If you do not yet know your actual income for 2018/19, you must still submit an estimate of your income by 31 July and then contact HMRC again by 31 January 2020 to either confirm the estimate is correct or replace it with the actual figures.

‘It is important to read the guidance notes carefully, particularly the parts that explain what counts as income for tax credits. Some of the renewal documents will show income figures that HMRC have obtained from their tax system but these may not include the deductions that are allowable for tax credit purposes.’

Changes to report to HMRC

Any changes to circumstances must be reported immediately to HMRC, including:

  • living circumstances change, for example you start or stop a relationship, move in with a new partner, get married or form a civil partnership, permanently separate or divorce;
  • child or partner dies;
  • child leaves home, for example moves out or goes into care;
  • child is taken into custody;
  • child over 16 leaves approved education or training, or a careers service;
  • childcare costs stop, go down by £10 or more a week, or you start getting help with them;
  • childcare provider is no longer registered or approved;
  • working hours fall below 30 hours a week (combined if in a couple with children); and
  • working hours fall below or go above the minimum required to qualify.

Recent tax credit applicants who first claimed tax credits after 6 April 2019 do not have to renew their tax credits until April 2020. Going forward, tax credits are being transferred to universal credit and HMRC is not taking any new applications.

Universal credit (UC) is gradually replacing working tax credit and child tax credit as well as some other means-tested benefits.

Angela MacDonald, HMRC’s director general of customer services, said: ‘The 31 July deadline is fast approaching and renewing your tax credits is something too important to forget. HMRC support is available at all times of the day and night via gov.uk and the smartphone app.

‘I urge those who are yet to renew to do so as soon as possible, in order to avoid having their payments stopped.’

Tax credits can be renewed online at gov.uk and via the HMRC app available on AppStore for iPhone or Google Play Store

Tax credits helpline: 03453003900

Sara White | 25-07-2019

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