Millions warned to renew tax credits or risk missing out on up to £3,400 in benefits
MILLIONS of Brits have been warned to renew their tax credits or risk missing out on thousands of pounds in benefits.
HM Revenue and Customs (HMRC) is sending out 2.5million renewal packs to tax credit claimants from this week.
There are two types of tax credits - working tax and child tax credit.
They’re given to people if they’re on low incomes, are registered as disabled or have children that are dependent on them.
Many people have been switched from tax credits to the newer Universal Credit system.
But there are also plenty of people still on the old-style system.
You’ll need information on your (and your partner’s) total income for the last tax year, which ran from April 6 2020 to April 5 2021.
You should receive your renewal pack by June 4.
If you haven’t got one by this point, you’ll need to contact HMRC on the same phone number as above.
What happens if I don’t renew my tax credits?
You have until July 31 to update your tax credits or risk losing your benefits.
If you miss the deadline your tax credits payments will stop.
HMRC will then send you a letter, which will say TC607 on it, and you'll have to pay back the tax credits you’ve received since April 6 this year.
You have to contact them within 30 days and tell them why you missed the deadline and you need to have a "good cause" for doing so.
You could be given until January 31 next year to confirm your details but this isn't guaranteed and is decided on by a case by case basis.
If you don't respond after 30 days, you'll have to pay your tax credits back up to April 6 this year and your payments will stop.
How much do you get on working tax credits?
The rates vary depending on your personal situation, but you can get up to £3,240 for working tax credit or up to £3,435 for child tax credit.
How do I apply for tax credits?
You can no longer apply for working tax credit.
This is because it has been replaced by the Universal Credit system, which you can apply for instead.
To make an account, you'll need an email address and a phone number.
After that, you'll need to answer a set of questions about your current circumstances, known as your "to do list".
These include things like when you last received payment for a job, what your household income is and how many people depend on you financially.
If you've lost your job, Citizens Advice recommends that you don't apply until you've received your final wages or any final holiday pay.
This is because any money you receive after you've applied for Universal Credit will count as income and mean that you're entitled to less in your first payment.
You will then need to confirm your identity online.
In certain circumstances, you'll be able to apply over the phone, such as those who don't have regular access to the internet, are visually impaired, or have a physical condition that stops you from using a computer or smartphone.
To do this, you will need to contact the Universal Credit helpline to ask if you can apply by phone or arrange a home visit.
In this case, someone can call them on your behalf if you can't do it yourself.
Lots of people have been switched from tax credits to the newer Universal Credit system.
But there are also plenty of people who are still on the old-style system, and the final deadline for being moved across has been pushed back to 2024.
You may be eligible for Universal Credit if:
- You’re on a low income or out of work
- You’re 18 or over (there are some exceptions if you’re 16 to 17)
- You’re under State Pension age (or your partner is)
- You and your partner have £16,000 or less in savings between you
- You live in the UK
We explain when your benefits, Universal Credit or state pension will be paid over the May Bank Holiday.
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