People who claimed tax credits during 2017/18 and who have received renewal forms from HMRC, must act by July 31 so that their payments do not stop, advises the Low Incomes Tax Reform Group (LITRG).
The tax credits renewals process does two things: it finalises tax credit awards for the tax year that has just ended (2017/18) and it acts as a claim for the current tax year (2018/19).
Claimants who do not yet know their actual income for 2017/18 must still submit an estimate of their income by July 31 and they need to contact HMRC again by 31 January 2019 to either confirm the estimate is correct or replace it with the actual figures.
Even if someone did not receive any payments during 2017/18, or they have since stopped their claim, if they claimed tax credits at all during the 2017/18 tax year, they will receive papers; they should then follow HMRC’s instructions to finalise their claim for 2017/18 and, if necessary, make a claim for the current tax year (2018/19).
For people who had their tax credits claim stopped and who went on to claim universal credit during 2017/18, HMRC should have already finalised the 2017/18 claim and so no renewal pack should be issued. People who claim universal credit during this renewals period may find they have two packs to complete: one to finalise the claim for 2017/18 and the other to finalise the claim for the current year (2018/19).
LITRG Chair Anne Fairpo said:
“Anyone who has not received their renewal pack by now should contact HMRC to chase it up.
“They must then check carefully the details on the renewal forms and follow the instructions to make their declaration by July 31 if required.
“If you miss the deadline, you could find yourself having to repay to HMRC all of the tax credits you have received since the start of this tax year in April.”
Some claimants will receive two forms (one with a red line across it) with accompanying guidance notes. These are known as ‘reply-required’ renewals and the claimant must respond to HMRC by July 31. Other claimants will receive just one form (with a black line across it) and these people (known as ‘auto-renewals’) will have their claim for 2017/18 automatically finalised and renewed for 2018/19 using the details HMRC already hold. However, they must still contact HMRC if something on the form is wrong or they have had a change of circumstances.
Anne Fairpo said:
“Whether you are required to reply or are an auto-renewal, it is important you take any action necessary as soon as possible so that HMRC know how much to pay you for the rest of the year. Even if you are no longer entitled to tax credits, if you have received a renewal pack from HMRC you must still follow the instructions in it so HMRC can finalise your 2017/18 claim.”
Tax credits can be renewed online, via the HMRC App, by telephone or through the post. HMRC’s on-line service is found on the official GOV.UK website, either via their personal account (if they have set one up) or by going directly to the ‘Manage your tax credits’ service.
Unfortunately, this time of the year sometimes sees an increase in fraudulent activity which often targets the most vulnerable taxpayers. Claimants should remember that tax credits can only be renewed using the official HMRC phone number, GOV.UK website, the HMRC app or by post to HMRC’s Tax Credit Office.More Articles by Chartered Institute of Taxation (CIOT) ...