Amidst the renewal season for tax credits, HMRC has issued a crucial warning to 730,000 claimants. Those receiving Working Tax Credit and or Child Tax Credit will start receiving renewal letters starting this week.
HMRC Urges Tax Credit Claimants to Renew Claims to Avoid Payment Suspensions
People who receive tax credits across the UK are set to receive the notices on May 2 and June 19, 2024. According to officials, the majority of claims will be renewed automatically. Letters with the black stripe notices will be automatically renewed, whereas notices with the red stripe will have to be renewed by the recipient.
Less than 10,000 people will have to check their information and renew their claim manually on July, 31. Failing to do so on time will lead to payment suspensions, HMRC cautioned.
The fastest and simplest way for customers to renew their claim is through GOV.UK website or using the HMRC free and secure app, which allows them to trace their claim and find when they can receive their payments.
Myrtle Lloyd, HMRC Director General for Customer Services, highlighted the importance of issuing a response before the deadline to prevent payment disruptions, saying: “Tax credits are valued by many families for their essential contribution to the monthly family budget, so to avoid payments being stopped please respond to HMRC by the July 31 deadline.” According to calculations, this year's tax credit payments will be backdated to the beginning of the tax year on April 6.
Ms Lloyd stated that if customers failed to renew by the deadline, they risk seeing their payments suspended and will have to give back any overpayments.
The 2024-2025 tax credits letters may include anticipated payments for the tax year 2025-2026 — these are generated automatically and should be ignored.
HMRC Reminds Tax Credit Claimants to Report Changes, Warns of Universal Credit Transition and Scam Risks
HMRC has also reminded claimants to report any significant changes that could impact their claim. These can include relationship changes, such as relocating with a new partner, getting married or divorced; children leaving home; or a shift in working hours.
HMRC adds that tax credits will be completely suspended on April 5, 2025, as they are among the legacy benefits to be replaced by Universal Credit. The affected claimant will receive a notice from the Department for Work and Pensions (DWP), or the Department for Communities if they are located in Northern Ireland, explaining how to transition onto Universal Credit. This notice is called a Migration Notice and people are warned against ignoring it or their existing payments could be suspended.
Officials have also cautioned people to be careful with scams, as fraudsters tend to use deadlines to scam people expecting to be contacted by HMRC to share their banking information or other details. If you receive an unexpected phone call, text, or email, you are advised not to share any private information, nor to click on any of the attached links.
