Tax Credits can be a vital lifeline for a number of taxpayers on lower income so a gap in payments, or losing them entirely, could have a big impact. One of the most common reasons for payments to be stopped is not completing the renewal forms in time for the deadline of 31st July.
If a taxpayer is claiming tax credits already, they should automatically receive a pack from HMRC asking for their income details for the previous year in order to determine the award going forwards. It is important that these details are provided before the deadline so that payments will continue without a gap.
There are a number of ways taxpayers can convey their information to HMRC:
- By filling out the form and returning it to HMRC;
- Using the HMRC app;
- Phoning HMRC tax credits helpline (0345 300 3900);
- By going online using the personal tax account.
Our main tip for taxpayers when renewing tax credits is to ensure they read the guidance notes, which come with the renewal pack, carefully. It is common for some income sources to be missed off the claim as they don’t form part of “normal” employment income. These include things like dividends, investment income, interest, rental profits etc.
If a taxpayer’s main source of income is from self-employment, their accounts for the relevant period may not have been prepared and in cases like this, HMRC does allow for an estimate to be included on the renewal claim providing a final figure is given at the earliest opportunity (at the latest 31st January following the deadline).
Finally, it is worth noting that the government is gradually introducing Universal Credit which is replacing tax credits and some other social security benefits. No new claims for tax credits can be made now and if a taxpayer is looking for financial assistance under the “old” scheme, they are now advised to claim through Universal Credit.
Should you require any assistance with renewing your tax credits or for any more information relating to this, please contact our Tax Director, Jenny Marks.
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