Are you at risk of losing £3,865 in tax credits? Parents warned to check wording on their renewal letter as time is running out to reapply for benefits
- Families have until July 31 to reapply for tax credits or risk losing thousands
- If those affected miss the deadline, they may have to pay money back to HMRC
More than 500,000 Britons have only weeks left to apply for another ‘essential’ tax relief, or risk being stopped.
Parents receiving the benefit have until 31 July to check that the information in their renewal pack is correct and to respond to HMRC – otherwise they risk losing up to £3685 a year.
More than 500,000 tax credit customers must respond to HMRC by the deadline for the 2023 to 2024 tax credits.
Families must have already received their renewal package and must notify HMRC of any change in circumstances that may affect their claim.
More than 500,000 customers have to reapply for tax credits. The fastest way to check and renew your tax credits is to go online through the government’s website.
Myrtle Lloyd, HMRC’s Director General of Customer Services, urged families to reapply. He said: “Tax credits provide essential financial support for families, so it’s important that customers look out for their renewal package and renew before July 31.”
Each renewal letter has a black line that says “check now” or a red line that says “answer now.”
If your letter says ‘check now’ then ‘there’s nothing you need to do other than check that your details are correct.
However, if your letter says ‘respond now’, you must extend your tax credits no later than 31 July 2023, otherwise you risk losing your entitlement.
There are two types of tax credits: Working Tax Credit (WTC) which is paid to people who work and have low incomes, and Child Tax Credit (CTC) which is paid to people who have children.
There are different qualifying conditions for WTC and CTC, but you only use one claim.
The exact amount of employed person’s credit you get will depend on your circumstances, but you are entitled to a basic amount of up to £2,280 per annum.
There are additional elements that can increase your entitlement. For example, if you have a disability, you can get up to £3,685 a year.
The fastest way to check and extend your tax credits is to pay a visit online through the government website.
You can also renew them through the HMRC app or by phone or post. You will need your renewal package, information about any changes in your situation and details about your and your partner’s income for the past tax year (April 6, 2022 to April 5, 2023)
If they miss the deadline, benefits may be stopped and they may even have to pay back some money.
If you do not extend your tax credit, you will lose your entitlements and you will have to repay any credits you have received since April 2023.
If applicable, HMRC will send you a letter of confirmation entitled TC607.
However, you have 30 days to contact HMRC and explain why you missed the reasons for the delay – known as ‘good reason’ – before they reinstate your claim.
HMRC makes decisions on a case-by-case basis, but you may have until January 2024 to confirm your details.
Tax Credit customers will also face another major deadline at the end of 2024 as tax credits will be replaced by Universal Credit.
Universal Credit has already replaced tax credits for new applicants, but many families haven’t made the switch yet.
Customers who receive tax credits will receive a letter from the Department for Work and Pensions (DWP) stating when they can claim their Universal Credit.