30 May 2014

Tax credits - try and renew early if you can

We're now in the early stages of the tax credits renewal period. This is the time when HMRC finalise entitlement for the year just gone and process the claim for the year ahead. Some claimants are only asked to contact HMRC if they have a change to report or the income information on their notice is incorrect (auto-renewals) and others are asked to contact HMRC to confirm their circumstances and income details (reply-required).

Due in part to the use of real time earnings information(RTI) which provides earnings data from employers and occupational pension providers, this year we are expecting fewer people will be asked to confirm their details and more people will receive auto-renewal forms.

Even so, every year claimants struggle to get through to the tax credits helpline to renew their tax credits because the phone lines get so busy, especially towards the deadline on 31 July.

For the first time this year, HMRC have introduced a system to allow some people to renew their claims on-line. This is limited to people who need to provide their details to HMRC (reply-required) but who have no changes or corrections to report when they check their annual review. The on-line service is available on GOV.UK and you can read more about on-line renewals in our renewals section.

We would recommend that anyone who needs to telephone HMRC to deal with their renewal should try to do so as soon as they have the information they need, to avoid getting stuck as the phone lines get busier later on. Remember, if claimants renew early, before the deadline, but then have some more information or realise there is a mistake, they can tell HMRC before 31 July and they will correct the award.

Also, if someone has not received enough tax credits, the sooner they renew, the sooner HMRC will sort out their correct payments and release any underpayment for the year just ended. If their previous payments were too high, they could be building up a bigger overpayment until their renewal is processed.