Tax Credits

Tax Credits – Do I Have to Tell HMRC if My Circumstances Change?

Tax credits are benefit payments.  They’re paid to people in work that are low income or have children. There are two tax credits – working tax credit (for those working but on a low income) and child tax credit (for those on a low income, these are regardless of working or not with children). Existing tax credit claimants need to renew them each year.

New claimants must claim Universal Credit rather than Working or Child Tax Credits. Eventually, existing tax credit claimants will be moved over to Universal Credit. This is due to happen between November 2020 and December 2023.

Tax credits can go up or down as a result of changes in family or work circumstances.


Report Changes to HMRC


A tax credit claimant must report any of the following changes in circumstance to HMRC:

  1. Living circumstances. Let’s say, if a partner moves out, or you start to live with a new partner. You’re married or form a civil partnership, or you separate permanently, or you divorce.
  2. Your partner or child dies.
  3. A child leaves home or is taken into care.
  4. The kid is taken into custody.
  5. A child over the age of 16 leaves approved education or training or a career service.
  6. Childcare costs go down by more than £10 per week, or you start receiving help with childcare costs.
  7. If you’re in a couple, your combined working hours fall to below 30 hours per week.
  8. Working hours fall below the minimum needed for working tax credit. This depends on the circumstances.


Make a new claim if a relationship ends


Tell HMRC if any of the following occur:

  1. Go abroad for eight weeks or more.
  2. Leave the UK permanently or lose your right to reside in the UK.
  3. Reduce your working hours to less than 16 hours per week while claiming childcare costs.
  4. Stay on strike for more than 10 consecutive days.


Income Changes, Benefits and Working Hours


If tax credits are overpaid, the overpayment will need to be returned to HMRC. To avoid building up an overpayment that needs to be paid back.  HMRC should be notified if any of the following occur:

  1. Change in income (if increases or decreases by £2,500 HMRC) It should be notified immediately so that tax credit payments are adjusted.
  2. Combined working hours for a couple who have children are increased to 30 hours a week or more.
  3. You have a baby or take on responsibility for another child.
  4. Start or stop claiming benefits or your benefits change.
  5. Start or stop getting a disability payment.
  6. Your child is certified blind (or is no longer blind).
  7. Start paying for registered or approved childcare.
  8. Stop getting help with childcare.


The time limit for reporting changes


The above changes must be reported to HMRC within one month of the date on which they occur.


Report changes online


Changes can be notified online at changes affect.

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