TAX WARNING
Two million people must renew their tax credits by July 31 or risk missing out on thousands of pounds
THE Government is warning that over 2million people must renew their tax credits by July 31 2019 or they will the lose the benefit for good.
After the deadline has passed, anyone who has not completed their renewals will stop receiving their tax credits meaning they could miss out several thousand pounds a year.
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On top of that, anyone who misses the cut off point will have to pay back any money they received between April 1 and July 31 2019.
This could leave stretched families owing thousands of pounds to the Government.
HMRC is strongly urging people to make sure they renew their credits by the July 31 deadline and has launched a new advert to raise awareness.
What are tax credits?
Tax credits give extra support to working families.
There are two main kinds - Child Tax Credit and Working Tax Credit.
How much money you will receive depends on your income and your situation.
For instance, a family with two children born before April 2017 with an income of less than £6,420 a year could get £6,105 per annum in child tax credit.
If one of the children has disabilities, they could get substantially more.
Working Tax Credit is used to top up the income of working adults.
You need to work a certain number of hours every week, and your income has to fall below a certain level.
The level varies depending on your age, whether you're single or not and whether you have children.
For instance, someone aged 25-59 with no disabilities and no children needs to work at least 30 hours a week, whereas someone over 60 only needs to work 16 hours.
The government has a handy calculator to help work out .
Both benefits are being replaced by Universal Credit meaning new people can no longer apply.
But those who already get tax credits can continue to do so, as long as they renew on time.
How to renew your tax credits
YOU can renew online, via the app or over the phone.
Renewing online is quick and easy to do.
Once you've started the process you can to check on the progress of a renewal, and find out when you’ll hear back from HMRC.
Customers can also use the HMRC app on their smartphone to:
- renew their tax credits
- check their tax credits payment schedule
- find out how much they have earned for the year
You can also renew by phone on 0345 300 3900.
What happens if I don't renew in time?
Because the government is replacing tax credits with the new Universal Credit system, anyone who misses the tax credit deadline will not be able to reapply for the benefit.
Instead, affected families will have to apply for Universal Credit if they are eligible.
Even if the Universal Credit application is successful, there is usually a five-week wait before any benefits are paid.
This means that people could have a lengthy gap where they get no help.
HMRC has also said that anyone who fails to renew will have to pay back any money they received in April, May, June and July.
The amount you end up owing will depend on how much you get, but it could easily run into the thousands.
For instance, someone who received child tax credit for two children would have been over payed by approximately £2,000.
It is not clear whether this would have to be paid back immediately to HMRC or could be paid back in instalments.
We have asked the Government for clarification and will update this story when we know more.
Who needs to renew?
Anyone who needs to renew should have received a pack in the post.
HMRC says it has sent out over 4.8million renewal packs, and there are two different types, and what you need to do depends on which one you got.
Over 2million Brits received a red-striped pack which means you must renew your credits before the July 31 or you will be one of the people who loses the benefit.
The other kind of pack comes with a black stripe across the front. These are auto-renewals and were sent to 2.8million people.
If you received one of these, all you need to do is review the information and check it is correct.
If any of the information is wrong, you must let HMRC know, otherwise you do not need to do anything.
If you haven't received a pack, but you think you should have, call the tax credit helpline on 0345 300 3900.
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