More than 150,000 people are being warned to renew their tax credits this month to avoid losing out on future payments.
HMRC said parents in receipt of child tax credits and those who claim the working benefit have until 31 July to renew their applications for the next 12 months.
According to the tax authority, failing to renew could mean your payments are permanently terminated – and you might even have to repay the money you’ve received since April 2020.
Tax credits are designed to help working families with targeted financial support. In the UK, around 3million people are in receipt of it.
These payouts are made regularly by the government to support families on very low incomes. In most cases, they’ll be paid to parents/guardians who work between 16 and 24 hours a week.
It’s paid via the tax office – you can use this calculator to find out how much you may be entitled to.
For most people, the benefit has now been replaced by Universal Credit – you can now only make a new claim if you get the severe disability premium or got it in the past month and are still eligible for it.
However, those that do qualify for child tax credits can claim it until 31 August after their child’s 16th birthday.
Angela MacDonald, at HMRC, said: “If you have been contacted by HMRC to provide your income details, I urge you to contact the department before July 31.
“Don’t leave it too late, get in touch and make sure the information we hold is correct.
Who needs to renew?
Tax credit claimants who are due to renew will receive a red or black-striped pack in the post. The information you’ll need to submit will depend on which pack you receive – but make sure you respond in good time.
If nothing has changed your tax credit will auto-renew, but if your circumstances have changed you must let HMRC know.
HMRC says those most likely to get a red-striped pack are the self-employed, those in receipt of taxable benefits, such as employment and support allowance (ESA), and people with multiple sources of income.
In addition, self-employed people who haven’t filed their tax return for the 2019/20 tax year, must estimate their profit or loss and report this to HMRC online by July 31.
If you don’t do this HMRC will make tax credit payments based on the information it currently holds, and it can’t change this at a later date.
You’ll also need to confirm your actual income, once you know it, to HMRC by January 31, 2021.
How to renew your tax credits
Renew online at Gov.uk, here
Via the HMRC app, which is available on the App Store or Google Play Store