Individuals who have benefited from tax credits are being reminded to report any changes in their situation to HM Revenue and Customs (HMRC) before 31 July to avoid facing a hefty penalty.
Tax expert Andy Wood from Tax Natives called attention to the importance of taking action before the deadline to prevent incurring penalties that can amount to £3,000. Affected recipients are urged to act promptly upon receiving a renewal pack.
Tax credit claimants must inform HMRC of any changes in their circumstances, such as alterations in living arrangements, childcare situations, or employment status. Failing to do so could lead to severe financial repercussions, including the loss of tax credits or fines up to £300.
By 19 June, around 730,000 people are expected to receive a renewal application, to which they must respond by 31 July.The mentioned deadlines have been set to streamline the processing of applications and ensure the uninterrupted payment of tax credits.
Andy said: "You have multiple avenues to report changes, including online platforms and phone assistance from HMRC. Using these channels ensures that changes are accurately recorded, providing peace of mind for claimants and keeping the process efficient for HMRC. Having your National Insurance number, details of changes, and income information ready before contacting HMRC can also help streamline the process."
HMRC could Fine Tax Credit Claimants Up to £3,000
Andy Wood warned: "Non-compliance with reporting requirements can have serious repercussions such as loss of tax credits, repayment demands and even fines of up to £3,000 if incorrect information is provided. If you’re eligible for automatic renewal, check for the specified code 'TC 603 R' and accompanying letter in the renewal pack."
This code expedites the renewal process and prevents avoidable delays that may result in cessation of tax credit payments for claimants. If your form includes 'TC 603 R', you will receive an automatic renewal.
Andy also stressed the importance of contacting HMRC either in writing, by email or by telephone in case the renewal file has not been received, to avoid disputes or the potential exclusion of tax credits.
Andy added: "You are required to review your renewal pack and report any changes to HMRC by the end of July. These changes include living arrangements, childcare situations, and employment status. For instance, if childcare costs decrease by £10 or more per week, or working hours fall below 30 hours per week (combined for couples with children), report it to maintain the accuracy of the tax credit claim."
