Important notice on tax credits renewals
HMRC recently advised they would automatically renew all tax credits claims this year, apart from those identified as high risk. The majority of those impacted would therefore have their claim automatically renewed.
What has happened and who is affected?
Due to an error, HMRC sent around 1 million people a tax credits renewal pack (TC603R) that did not include some, or all, of the income information that they would use to calculate their awards.
HMRC stated “We are sorry for this omission and for any inconvenience we have caused. We would like to reassure you and your customers that the tax credits payments made since the start of April are correct and based on the information we hold and would normally use at this stage in the tax credits cycle to make provisional payments and renew awards”.
This error affects the renewals process for tax credits claimants with self-employed income, income from taxable social security benefits, or other income (for instance, income from shares and dividends).
How are HMRC rectifying this?
From 25 June 2020, HMRC will be writing to those who are affected by this, setting out all the information they need. This will be accompanied by other communications, including a message on GOV.UK and a text message for some, to give them the opportunity to contact HMRC in advance of receiving the letter.
What do claimants need to do?
To ensure HMRC have paid the correct amount for the award period of 6 April 2019 to 5 April 2020, HMRC are requesting claimants review the total household income that they hold for the 2019-2020 tax year.
In addition, self-employed claimants who have not yet submitted their tax return for the 2019/2020 tax year must estimate their profit or loss and report this with their renewal online or via the webchat service by 31 July 2020. Otherwise, HMRC will finalise their award using the information they currently hold, and this will not be changed at a later date.
If the income details are correct or claimants have already contacted HMRC about their income, and a self-employed estimate does not need to be given, then no action is required.
However, claimants will need to contact HMRC straight away if they disagree with any of the information in the letters or they need to inform HMRC of any changes.
Claimants should report changes by completing their renewal either:
- Online, at gov.uk/manage-your-tax-credits; or
- Through HMRC’s webchat service by searching ‘tax credits general enquiries’ on gov.uk.