What are Tax Credits?
There are two types of Tax Credits. There are Child Tax Credits, which are used to support families on a low income, whether they are currently in work or not. The other type is Working Tax Credits which assist working people on a low income. Once a year, you need to renew your claim in order to ensure you continue receiving tax credits. This can be a confusing process and a lot of people miss the deadline. Make sure you are not one of them by reading our easy guide.
If you receive tax credits, you will be given a renewal pack by the 30th of June. You can then choose to renew by post, phone or new for this year- online. You can’t renew your tax credits until you receive your renewal pack. If you claimed tax credits after the 6th of April, your renewal pack will usually be sent the following year.
You can renew your tax credits online if you have received a renewal pack with both:
- an annual review with code TC603 R
- an annual declaration with code TC603 D
Contact HMRC if you only received the code ending in R by calling the Tax Credit Helpline.
If your code is TC 603 D 2 then you must renew by phone or post.
If you choose to renew online, you must include the 15 digit number on the bottom right of your annual declaration.
Renewal by post
To renew by post, send your form to the following address. See below for details of when to send it and what to include.
HM Revenue and Customs Tax Credits
Renew by phone
Call the Tax Credit Helpline to renew your claim by telephone. See below what you should have to hand before you call.
If you only receive a form with the code TC 603 R your tax credits will be renewed automatically.
To renew your tax credits, you will need your:
- Renewal pack.
- National Insurance Number.
- Details about any changes in your circumstances.
- Total income for the year (including your partners)
- Tax Credit Helpline password if renewing by phone.
What happens after I renew?
The Tax Credit office will send out an award notice within eight weeks of receiving your renewal.
When is my renewal due?
Unless your renewal pack states differently, the deadline for renewing your tax credits is the 31st July. According to HMRC, a week before the deadline and around 865,000 has not yet submitted their renewal. Last year, 650,000 people failed to renew on time. If you miss the deadline, your credits cannot be renewed and will be ended 30 days after you receive a summary stating that your credits are to stop.
What happens if I fail to renew?
If you miss the deadline, your credits cannot be renewed and will be ended 30 days after you receive a summary stating that your credits are to stop.
If you believe that you are no longer eligible to claim tax credits, you must tell HMRC immediately. For example, if your income increases or a child leaves home, you must report this. If you do not, you will receive an overpayment. You must repay any overpaid money and you may face a penalty of up to £3000.
So, if you are one of the 865,000 who has not yet renewed, why not do it now? It won’t take long and it ensures your credits will keep coming for the next year. Don’t be one of the few with the ‘dog ate my form’ excuse, just get it over and done with.