Tax credit claimants urged to renew by end of the month to keep the payments

The Low Incomes Tax Reform Group (LITRG) is urging people in receipt of tax credits to complete their renewals by July 31 to avoid their payments stopping.

The majority of tax credit claimants have to renew by July 31 2016 and LITRG is encouraging them to do so now to avoid any potential anxiety with struggling to get through to HMRC on deadline day or having their tax credits stopped if they miss the deadline.

LITRG cautions that even if you no longer want to claim or think you are no longer entitled, if you have claimed tax credits at all during the 2015/16 tax year, you will still be included in the renewal exercise and will need to make sure you follow HMRC’s instructions to complete and finalise your claim for 2015/16.

HMRC is offering an expanded online service this year as well as the option to use the new HMRC App for smartphone users. But as digital transactions become more popular, LITRG is stressing the need for people to be especially vigilant of scams targeting claimants through fake emails, websites, phone calls and even text messages.

By July 31 most tax credit claimants must complete and return their renewal forms, either by post, telephone, on-line or via the HMRC App.  Most claimants will receive two forms with accompanying guidance notes. These are known as ‘reply-required’ renewals. Others (known as ‘auto-renewals’) will receive just one form and they will have their claim for 2015/16 automatically finalised and renewed for 2016/17 unless they contact HMRC to say something on the form is wrong or they have had a change of circumstances.

Anthony Thomas, Chairman of LITRG, said:

“Anyone who has not received their renewal pack by now should contact HMRC to chase it up.

“People should read the guidance notes carefully, particularly the parts that explain what counts as income for tax credits. Although someone’s renewal form may show an income figure that HMRC has obtained from the tax system,1 there are several deductions that are allowable for tax credit purposes so people should read the notes carefully to see if any of these apply to them. They must then carefully check the details on the 603R review before making their declaration by July 31.

“Whether you are required to reply or are an auto-renewal, it is important you take any necessary action as soon as possible so that HMRC knows how much to pay you for the rest of the year. Even if you are no longer entitled to credits, you must still respond in order that HMRC can finalise your 2015/16 claim. If you have been paid too little for the previous tax year, the sooner you renew, the sooner you will receive that underpayment.

“If you fail to renew on time, you could find yourself having to repay to HMRC all the tax credits you have been paid since the start of the tax year in April.”2

How do I renew?

Tax credits can be renewed through post, phone, online or via the HMRC App. HMRC’s tax credit helpline is an 0345 number which is the same cost to call as a standard UK landline phone number. We expect the phone line to be extremely busy in the lead up to the July 31 deadline. However you can also renew your tax credits online or by downloading the HMRC App. Those renewing online must do so through the official GOV.UK website.

Unfortunately, this time of the year sometimes sees an increase in fraudulent activity which often targets the most vulnerable taxpayers. Claimants should remember that tax credits can only be renewed using the official HMRC phone number, GOV.UK website, the HMRC app and by post to Tax Credit Office in Preston.

Further information on renewing tax credits (including the requirements for doing so) can be found here; the process for the renewal can be started, here. HMRC can be contacted either using the official phone number – 0345 300 3900 – or the official HMRC online service via the GOV.UK website. The HMRC App is free and can be downloaded from the App Store or Google Play store.

Notes for editors

1.       Employers and pension providers send data about earnings and pensions to HMRC for income tax and national insurance purposes throughout the year via the Real Time Information (RTI) system. In some cases, HMRC will use this data as part of the tax credit renewals process. For those who receive auto-renewals, the data will be used to finalise the 2015/16 claim and renew the claim for 2016/17 unless the claimant tells HMRC that the figures are incorrect or that they have deductions to be made from those figures. For reply-required renewals, the data will be shown on the form as a guideline, but claimants should still check the figures carefully and, if they are incorrect or the claimant is entitled to make deductions from them, substitute the accurate 2015/16 data on the declaration form.

2.       Once the July 31 deadline passes, if a claimant has not renewed their claim, HMRC will stop payments and issue a Statement of Account. If the claimant contacts HMRC within 30 days of the date on the Statement of Account, the claim will be reinstated from 6 April. If they do not, then all payments made from 6 April will be owed back to HMRC and the claimant will need to make a new claim that can only be backdated up to 1 month. If the claimant has good cause for missing the 31 July deadline, then they may be able to have the claim reinstated up to the 31 January 2017.

3.       Low Incomes Tax Reform Group

The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 17,600 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk (Out of hours contact: George Crozier, 07740 477 374)