HMRC is currently sending the annual tax credit renewal packs to some 1.5 million tax credit claimants and is encouraging recipients to renew their tax credits claim online. HMRC started writing to taxpayers on 2 May and expects all packs to be with recipients by the 15 June 2023.
A renewal is required if the pack has a red line across the first page and it says, 'reply now'. Families and individuals that receive tax credits should ensure that they renew their tax credit claims by 31 July 2023. Claimants who do not renew on-time may have their payments stopped. Around 500,000 taxpayers are expected to receive these packs and can renew their tax credits via GOV.UK or on HMRC’s app.
If the renewal pack has a black line across the front page and says ‘check now’, then you will need to check your details are correct. Taxpayers need to notify HMRC where there have been changes to the family size, childcare costs, number of hours worked and salary. Details of previous year's income also need to be completed on the form to allow HMRC to check if the correct tax credits have been paid. Claimants must also inform HMRC of any changes in circumstances not already reported during the year such as new working hours, different childcare costs or changes in pay.
Universal Credit is expected to fully replace tax credits, and other legacy benefits (including Income-Related Employment and Support Allowance, Income-Based Jobseeker’s Allowance) by the end of 2024. This means that claimants who receive tax credits will receive a letter from the Department for Work and Pensions (DWP) telling them when to claim Universal Credit.