HUNDREDS of thousands of low-paid workers and parents have one month to check and renew their tax credits or risk having their benefits stopped.
Around 2.8million claims for child tax credit and working tax credit will renew automatically this year, but an additional 150,000 people need to actively renew claims themselves by July 31.
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Fail to do this and not only will your tax credits stop, but you’ll also be unlikely to be able to apply for tax credits again.
That’s because Universal Credit has mostly replaced tax credits for new claimants other than for those who get or who are entitled to get a benefit known as the severe disability premium.
But moving onto Universal Credit could leave you worse off. Plus, there is usually a five-week wait before it’s paid – something The Sun has called to be reduced as part of our Make Universal Credit Work campaign.
Whether your tax credits renew automatically or not, you also still need to check your application to ensure nothing has changed.
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new claimants can no longer get the benefit – unless they get or qualify for the severe disability premium – as it’s been replaced by Universal Credit, it’s important those who do get them renew their claim.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 basic amount for working tax credit is £2,045 a year, while the basic amount for child tax credit – also known as the “family element” – is up to £545, plus up to £2,830 for each non-disabled child (disabled children get more).
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.
If any information HMRC holds is incorrect or incomplete, you may have to pay back any tax credits that have been overpaid, as well as a potential fine on top of up to £3,000.
HMRC’s director general for customer services, Angela MacDonald said: “If you have been contacted by HMRC to provide your income details, I urge you to contact the department before July 31.
“Don’t leave it too late, get in touch and make sure the information we hold is correct.”
Who needs to renew?
Tax credit claimants will get a pack in the post. There are two different types of pack, and what you need to do depends on which one you get.
Some will receive a red-striped pack, which means you must renew your credits before July 31 or you will be one of the people who loses the benefit.
The other kind of pack comes with a black stripe across the front. These are auto-renewals where you need to review the information.
If nothing has changed your tax credit will auto-renew, but if your circumstances have changed you must let HMRC know.
HMRC says those most likely to get a red-striped pack are the self-employed, those in receipt of taxable benefits, such as employment and support allowance (ESA), and people with multiple sources of income.
In addition, self-employed people who haven’t filed their tax return for the 2019/20 tax year, must estimate their profit or loss and report this to HMRC online by July 31.
If you don’t do this HMRC will make tax credit payments based on the information it currently holds, and it can’t change this at a later date.
You’ll also need to confirm your actual income, once you know it, to HMRC by 31 January 2021.
How do I renew my tax credits?
You can log onto your account via Gov.uk or via the HMRC app to renew tax credits, report any changes, and to find out when you’re due to be paid credits.
Alternatively, you can renew by post or by calling HMRC on 0345 300 3900.
You’ll need the following information to hand:
- your renewal pack – if you do have your renewal pack yet, contact HMRC
- your National Insurance number
- details about any changes to your circumstances
- you and your partner’s total income for the last tax year (April 6, 2019 to April 5, 2020)
- the 15-digit renewals reference number on your renewal pack – if you’re renewing by phone
