One week warning for 730,000 on benefits who risk payments stopping – ‘red line’ check to make NOW to avoid missing out
TENS of thousands of people could see their tax credit payments stopped if they miss the renewals deadline.
Worse, if you fail to reply on time, you could have to repay all the tax credits you’ve earned since April 2024.
For people earning the maximum amount, this could amount to thousands of pounds in lost benefits, as well as a significant amount of money that needs to be repaid.
For instance, a couple that only earns working tax credits with no additional elements on top gets up to £2,500 a year.
Not only would they lose that money if they fail to renew, they’d also have to repay around £830 for the four months between the start of the tax year and the renewal deadline.
Someone with a severe disability could get up to £5,640 a year added on. Again, they’d lose this money and would also face repayments of over £1,800.
A family that also gets child tax credits would lose higher amounts and have to repay a bigger sum, too.
The government says that around 730,000 people have received annual renewal notices, which started landing in households’ letter boxes from May 2.
Everyone who needs to renew should have had their letter by June 19.
What am I looking for on my letter?
The good news is that most people simply need to check the information in their letter is correct. If it is, they don’t need to do anything and their benefits will renew automatically.
However, if you received a notice with a red stripe on it, you need to renew the claim.
The deadline for doing this is July 31, and if you miss it your payments might be stopped.
The quickest and easiest way to renew your tax credits is online or through the HMRC app.
There also a helpful video about managing tax credits on the app, which shows you what you need to do.
You can also renew tax credits by phone or post.
You’ll need to have details about any changes to your circumstances to hand, and you’ll need to be able to detail your income for the last tax year (April 6 2023 – April 5 2024) – including your partner’s if you have one.
If you’ve not received your renewal pack, you should urgently contact HMRC to get one.
If you miss the deadline, HMRC will send you a statement called the TC607. You have 30 days from the date on this statement to get in touch.
If you do, your claim might be restored, which would mean you keep getting the tax credits and you don’t have to pay anything back.
If you contact later than 30 days from the date of the statement, you will be asked to explain the reasons you missed the deadline.
Unless you are deemed to have “good cause”, your tax credits will not be renewed, and you will have to make repayments.
If you do have good cause and your credits are renewed, HMRC will let you know how much you’ll get within eight weeks.
If you don’t contact HMRC at all after receiving the statement, you won’t get your tax credits anymore, and you’ll have to repay everything you received after April 6, 2024.
You won’t be able to reapply for tax credits, but you may be eligible for Universal Credit if you’re below state pension age.
However, you will need to start the Universal Credit process, and there will likely be a delay before you start receiving any benefits again.
If you’re over state pension age, you might be able to apply for Pension Credit.
Reporting changes of circumstances
If you need to renew your tax credits, you’ll be asked to notify HMRC of any changes to your circumstances.
But anyone who receives credits must report certain changes within a month, regardless of whether they must renew their benefits or not.
Failure to do so could mean a £300 fine, and giving HMRC the wrong information could lead to a £3,000 fine.
You will also have to repay any credits you received that you shouldn’t have.
The changes you need to report include if your:
- 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 stops going to childcare for four weeks or more when they would normally go
- childcare costs stop, go down by £10 or more a week, or you start getting help with them
- child leaves home
- child is taken into custody
- child over 16 leaves approved education or training
- childcare provider is no longer registered or approved
- working hours fall below 30 hours a week
- working hours fall below or go above the minimum required to qualify
You must also tell HMRC straight away if you go abroad for eight weeks or more, leave the UK permanently, start working for less than 16 hours while claiming childcare costs, or have been on strike for more than 10 consecutive days.
What are tax credits and how much can I get?
THERE are two types of tax credit - working tax credit and child tax credit - and almost 3million people currently get them, according to HMRC.
While most new claimants can no longer get the benefit – unless they get or qualify for the severe disability premium – as it’s been replaced by Universal Credit, it’s important those who do get them renew their claim.
Working tax credit is a benefit given to those in work, while child tax credit is for families with kids – whether they’re working or not.
Whether you qualify and how much money you receive depends on your income and situation.
The rates vary depending on your personal situation, but you can get up to £3,240 for working tax credit or up to £3,435 per child for child tax credit.
With working tax credit, you need to work a certain number of hours every week, and your income has to fall below a certain level.
The number of hours you’re required to work depends on your age, whether you’re single or not and whether you have children.
The government has a handy calculator to help work out how much you should receive.
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