The Low Incomes Tax Reform Group (LITRG) is urging people to contact HMRC if they have missed the tax credits renewals deadline (31 July). The sooner people contact HMRC then the sooner they can get their tax credit payments re-started – or if they are lucky, they might catch HMRC in time to renew before their payments are stopped.
Meeting the 31 July deadline was crucial for those who were told to contact HMRC to renew their tax credits. HMRC will begin shortly to terminate the tax credit payments of people who missed the deadline and send them a Statement of Account. This will tell them that HMRC have stopped their payments and also ask for all of the tax credits paid since the start of the 2018/19 tax year (that is, from 6 April 2018) to be paid back.1 If this happens, all is not lost, but you need to act quickly, says LITRG.
Head of LITRG Victoria Todd said:
“We urge people to contact HMRC as soon as possible if they have missed the 31 July deadline.
“If HMRC have stopped their payments, provided they contact HMRC within 30 days of the date on their Statement of Account and renew, HMRC will process the renewal and reinstate their 2018/19 claim back to 6 April 2018.
“If someone is self-employed and does not yet have final details for the 2017/18 tax year they must give an estimate and then either confirm the estimate, or file actual figures, by 31 January 2019.”
If someone misses this 30-day deadline, they can only renew and secure their annual entitlement for 2018/19 if they complete their renewal by 31 January 2019 and can satisfy HMRC that they had ‘good cause’ for missing both the 31 July deadline and the extra 30-day deadline.
Victoria Todd added:
“If someone misses the extra 30-day deadline and does not satisfy HMRC that they have ‘good cause’ for being late, HMRC will ask them to repay all tax credit payments made to them from the start of the tax year. They will then need to make a fresh tax credits claim if they want to carry on receiving tax credits, but that will only be backdated a maximum of 31 days. In some areas, it is no longer possible to make a brand new tax credit claim due to the introduction of universal credit. Most people who live in areas where universal credit full service has rolled-out will need to claim universal credit instead of tax credits in this situation.”2
- For the 2017/18 renewals cycle, claimants had until 31 July 2018 to renew their tax credits awards. This means that claimants who received two forms – one with a red line across it – were told to contact HMRC to renew by 31 July 2018 otherwise their claim would not be renewed and their payments would stop. Each year, tax credits claimants receive a renewal pack from HMRC. The renewals process does two things: firstly, it finalises the claim for the tax year that has just ended (2017/18) and secondly it acts as a claim for the new tax year (2018/19). Even if you no longer want to claim or think you are no longer entitled, if you claimed tax credits at all during the 2017/18 tax year you should have been included in the renewal exercise to finalise your claim for that year. If you ended your tax credit claim during 2017/18 and claimed universal credit in the same tax year, you will not receive a renewal pack as your claim for 2017/18 should already have been finalised.
- If someone has made a universal credit claim and has their tax credits award reinstated because they have renewed within 30 days of the Statement of Account or by 31 January 2019 and have good cause – HMRC will reinstate their tax credits from 6 April 2018 but it will only be awarded until the day before the universal credit claim started.