OVER one million households should look out for letters in the post to avoid missing out on thousands of pounds.
HM Revenue and Customs (HMRC) will finish sending households on tax credit renewal packs next week.
The letters started being issued on May 2 and will continue to be posted until Thursday, June 15.
But if households don’t act on the back of these letters the benefit could be stopped, and you could even have to pay money back.
Tax credit customers have until July 31 to check the information in their renewal pack is correct.
They’ll need to notify HMRC of any changes to their circumstances which may affect their claim.
There are two types of tax credits – working tax and child tax credit.
They’re given to people who are on low incomes, are registered as disabled or have children that are dependent on them.
The rates vary depending on your personal situation and there are a number of elements, but you can get up to £2,280 if you’re eligible for the basic element of working tax credit or up to £3,235 if you claim the child element of child tax credit.
Universal Credit has replaced tax credits for new claimants, but many have not yet made the switch over to the newer benefit.
Everyone will be transitioned over to receiving Universal Credit eventually and by 2024, the government has said.
But if you already claimed tax credits in the previous financial year you’re able to renew them once you’ve received your renewal pack.
How do I renew my entitlement for tax credits?
You should have been sent a renewal pack, which contains all the information you need in order to renew your tax credits.
This will include information on how your circumstances have changed, and the income of you and your partner for the previous tax year, which ran from April 6 2022 to April 5 2023.
There are two types of renewal packs:
- If it has a red line across the first page and says “reply now”, customers will need to confirm their circumstances to renew their tax credits
- If it has a black line across the first page and says “check now”, customers will need to check that their details are correct. If they are, they do not need to do anything and their tax credits will be automatically renewed
More than 500,000 tax credits customers will need to reply to HMRC by the deadline to confirm their circumstances for the 2023/24 tax year, or risk having their payments stopped.
Customers can renew their tax credits for free via Gov.UK or the HMRC app.
You can also renew over the phone by calling HMRC on 0345 300 3900.
What if I don’t put in a renewal claim?
If you don’t put in a renewal claim you’ll lose your entitlement to the benefit and you may have to pay back any tax credits you’ve received since April 6 this year.
HMRC will then send you a letter, which will say TC607 on it to confirm this.
However, you will have 30 days to contact the HMRC and tell them why you missed the deadline.
You could be given until January 31 2024 to confirm your details but this isn’t guaranteed and is decided on a case-by-case basis.
If you don’t respond within 30 days of receiving the letter you’ll have to pay back all tax credits received since April 6 this year.
How much could I get with tax credits?
The exact amount you can get depends on your circumstances, so take the below figures with a pinch of salt.
For working tax credit, you are entitled to a basic amount worth up to £2,280 a year, and you might get extras on top.
You can also earn more if you’re eligible for the following extra elements:
- A single parent or couple applying together: up to £2,340 a year
- Working at least 30 hours a week: up to £950 a year
- Disability: up to £3,685 a year
- Severe disability: up to £1,595 a year (usually on top of the disability payment)
- Paying for approved childcare: up to £175 (one child) or £300 (two or more children) a week
For child tax credit, the amount you are entitled to depends on when your children were born.
If your kids were born before April 6, 2017, you could get the “child element” of child tax credit for all of them.
You’ll also get the basic amount, known as the “family element”.
If any of your children were born on or after April 6, 2017, you could get the child element for up to two of them.
You might get the child element for more children if exceptions apply.
You’ll only get the family element if at least one of your children was born before April 6, 2017.
Here’s how much each element is worth:
- Family element: up to £545
- Child element: up to £3,235 per child
- For each disabled child: up to £3,905 (on top of the child element)
- For each severely disabled child: up to £1,575 (on top of the child element and the disabled child element).