Tax Credit Renewals

HMRC is currently sending the annual tax credit renewal packs to some 2.1 million tax credit claimants and is encouraging recipients to renew their tax credit claims online. A renewal is required if the pack has a red line across the first page and it says, 'reply now'. Families and individuals that receive tax credits should ensure that they renew their tax credit claims by 31 July 2022. Claimants who do not renew on time may have their payments stopped. Around 630,000 taxpayers are expected to receive these packs and can renew their tax credits via GOV.UK or on HMRC’s app.

If the renewal pack has a black line across the front page and says ‘check now’, then you will need to check your details are correct. Taxpayers need to notify HMRC where there have been changes to the family size, child care costs and the number of hours worked and salary. Details of the previous year's income also need to be completed on the form to allow HMRC to check if the correct tax credits have been paid. Claimants must also inform HMRC of any changes in circumstances not already reported during the year such as new working hours, different childcare costs or changes in pay.

Universal credit is expected to fully replace tax credits, and other legacy benefits (including Income-Related Employment and Support Allowance, and Income-Based Jobseeker’s Allowance) by the end of 2024. HMRC recently restarted their managed migration process that was paused during the pandemic. This means that claimants will gradually be notified of when they will be asked to move to Universal Credit so as to complete the process by 2024. Claimants can also elect to move from tax credits to Universal Credit if they would be financially better off and can use an independent benefits calculator to check.

Get in touch now to discuss your circumstances with us.