Time to renew your Tax Credits

by | May 25, 2022 | Tax

HMRC is currently issuing tax credit renewal packs. There are two versions of the form which require different responses. What action is required to renew your claim?

Renewal process. If you received tax credit payments in 2021/22 you should receive a renewal pack from HMRC by the end of May 2022. You then have until 31 July to check the information shown is correct and, if necessary, tell HMRC of any changes that may affect your claim, e.g. childcare costs, working hours or amount of income.

Action required? This year there are two types of renewal pack:

  • the first version requires a response from you. It has a red line across the first page and says “reply now” . You must confirm the information shown and provide any additional or amended information by 31 July or your payments will stop
  • the second version may not require any action. It has a black line across the first page and says “check now” . You must review the information shown on the document. If it’s correct you don’t need to do anything and your tax credits claim will be renewed automatically. Otherwise you need to notify HMRC of any changes by 31 July or the payments you receive may be incorrect.

You can renew your claim by phone, post or by using HMRC’s Tax Credits app on a mobile device (see The next step ).

New guidance. On 6 May HMRC amended its guidance regarding what pension income you need to report when you claim or renew your tax credits . You should exclude any tax-free lump sum payments you’ve received from a registered (approved) pension fund. Examples of these are: a pension commencement lump sum (also known as tax-free cash); and the tax-free element of a pension drawdown payment, known as an uncrystallised fund pension lump sum.

Tip. If you’ve received money from a pension scheme and aren’t sure if it included a tax-free element, your pensions adviser or the pension company will be able to tell you.

If the form has a red line across the front page you must contact HMRC by 31 July to confirm or advise it of details of your income etc. If the form has a black line across it you only have to respond if the information shown is incorrect.

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