The packs will be sent out over the next six weeks and all claimants should receive theirs by 4 June. Many tax credits claimants will have been affected by the pandemic and may have earned less than in previous years. It is important taxpayers check that the details contained in their annual renewal pack are correct, including income details, ahead of the 31 July deadline.
To renew online, taxpayers can log into GOV.UK to check on the progress of their renewal. They can also use the HMRC app on their smartphone to renew their tax credits, check their tax credits payment schedule and find out how much they have earned for the year.
Taxpayers do not need to report any temporary reductions in their working hours as a result of COVID-19. They will be treated as if they are working their normal hours until the Coronavirus Job Retention Scheme closes. HMRC has recently added a ‘coronavirus payments’ section, showing payments relating to coronavirus that must be included in income for tax credit claims and renewals.
“We don’t yet know whether HMRC will be auto-renewing tax credits for more claimants as they did last year – in any case, figures should be carefully checked and all self-employed individuals need to give figures to HMRC”, warns ICAEW’s Tax Faculty.
Self-employed claimants should make sure they include any SEISS grants (1-3) in their 2020/21 income figures when renewing their tax credits. They can give HMRC a provisional figure by 31 July but can update it up to 31 January 2022, provided they have stated it is provisional.
If there is a change in a claimants’ circumstances that could affect their tax credits claims, they must report the changes to HMRC. Circumstances that could affect tax credits payments include changes to:
- living arrangements;
- childcare;
- working hours; or
- income (increase or decrease).
HMRC warns that criminals can take advantage of tax credits renewals by text, email or phone taxpayers offering ‘rebates’ or threatening them with arrest if they don’t pay bogus tax owed. Many scams mimic government messages to look authentic.
If someone contacts a taxpayer claiming to be from HMRC, asks for bank or other personal details, threatens arrest or demands that they transfer money, it might be a scam. Check GOV.UK for HMRC’s scams checklist, and to find out how to report tax scams and recognise genuine HMRC contact.
Find out more about the Tax Faculty and upcoming events.
