Most people receiving tax credits should have their tax credits renewed automatically however there are some groups of circumstances that need to manually advise HMRC of any changes to continue receiving tax credits.
HMRC need to know that the household income level they use to determine the amount of the award is correct before continuing to make payouts. Groups whose income cannot be determined automatically include:
- The self-employed. If you are self-employed and do not currently have the full profit and loss information for your trading in the 2019-2020 tax year, HMRC will accept an estimate.
- People who also receive other types of taxable social security benefit.
- People who have multiple sources of income.
People in the above groups, and others who HMRC want to confirm their eligiblity status, should have an an annual review pack to complete. HMRC provide an online service to renew tax credits online at gov.uk.
The deadline is set for the end of July to get renewals completed, otherwise payments could be stopped until contact is made. Considering the circumstances affecting the entire country at the moment HMRC stresses the importance of not having a gap to payments in a likely already stressed financial situation.
The Chancellor committed to increasing the tax credit payment for everyone claiming working tax credit by £20 weekly until the end of the the 2020 tax year (April 5th 2021).
It is important to make sure that the amount being received by claimants is correct and based on complete information. Any amount overpaid would have to be paid back and penalties are possible too.