HMRC have started their annual process of sending out tax credit renewal packs to claimants. The packs are being sent out over the next six weeks and claimants should have received their pack by 4 June 2021.
Many claimants will have been affected financially as a result of the Covid-19 pandemic, and their income may have fallen as a result. It is therefore important that they check the details contained in their renewals pack, and in particular that their income details are correct.
Changes that affect a tax credit claim, such as a change in living arrangements, childcare, working hours or income, must be reported to HMRC. However, where income has fallen temporarily as a result of coronavirus, this does not need to be reported; HMRC will treat the claimant as if they are working their normal hours until the Coronavirus Job Retention Scheme (CJRS) comes to a close on 30 September 2021.
When working out income for the purposes of a claim, payments received under the CJRS, any amounts repaid by the Government under the Eat Out to Help Out Scheme, grants under the SEISS, retail, leisure or hospitality grants and small business grants must be included, although Test and Trace Support Payments and the one-off payment of £500 made to working households receiving tax credits can be ignored.
Renewal claims must be made by 31 July 2021 and can be done online.
Written by the Tax Advice Network