Everything you need to know about Tax Credits
Tax credits provide 1.5 million working families with targeted financial support to help them stay in work and raise their families. With the deadline for renewing your Tax Credits fast approaching, Parenting Daily put a list of questions to the experts at HM Revenue and Customs (HMRC) to ensure you have the answers you need.
What are Tax Credits?
There are two types of Tax Credits: Child Tax Credit or Working Tax Credit. The average claim is worth thousands of pounds a year and can provide a real boost to your finances.
Why are we talking about tax credits now?
Because the renewal deadline is fast approaching. HM Revenue and Customs (HMRC) is reminding everyone who receives tax credits that they must check or renew their claim before 31 July to avoid their payments being stopped.
Can I apply for tax credits?
No! Universal Credit has replaced tax credits for new customers. You can apply for Universal Credit, or for Pension Credit if you and your partner are of State Pension age or over. Find out more at GOV.UK.
Can I receive Universal Credit and tax credits?
You cannot claim tax credits and Universal Credit at the same time. Your tax credits will stop if you or your partner apply for Universal Credit.
By the end of 2024, tax credits will be replaced by Universal Credit for working age claimants. If you receive tax credits you will receive a letter telling you when to claim Universal Credit. You need to claim by the deadline shown in the letter to continue receiving financial support. Your tax credits will end even if you decide not to claim Universal Credit.
Who needs to renew their claim?
If you receive tax credits HMRC will write to you by 15 June. There are two types of letters to look out for: if your renewal pack has a red stripe across the page then you will need to check the information, renew and report any changes by 31 July. If your renewal pack has a black stripe across the page, you need to check the information is correct, and you will only need to contact HMRC if you have any changes to report.
How do you renew?
The quickest and easiest way is online – go to GOV.UK and follow the instructions. You can also renew using the HMRC app, which you can download for free from your smartphone. The app is secure and allows you to track your claim and details when you can expect payments. Renewing online or via the app means that you can do it at a time and a place that’s convenient to you.
What if my circumstances have changed?
HMRC does need to be notified of some life changes because it could affect how much you are entitled to. For example, if you move in with a new partner, get married or divorced, your child moves out, or perhaps your working hours are reduced. You can report any changes via the HMRC app or on GOV.UK.
What help and support is available?
There’s lots of support on GOV.UK and a helpful video on YouTube. And organisations such as Citizen’s Advice also have information on their website.
What happens if I don’t renew by the deadline?
If you need to renew but fail to, you risk your payments being stopped or having to repay any overpayments.
How do I avoid scammers?
Criminals use deadlines, like the one for tax credits renewals, to trick people who might be expecting to hear from HMRC into sharing their banking or other details. If a phone call, text or email is unexpected, don’t give out private information or reply, and don’t download attachments or click on links. It’s ok to reject, refuse or ignore any requests - only criminals will try to rush or panic you.
You can forward suspicious texts claiming to be from HMRC to 60599 and emails to phishing@hmrc.gov.uk.
