HMRC ‘misleading’ Working Tax Credit claimants affected by the pandemic – should you act?

Complex rules

Reduced hours were essentially treated as the same hours as they were before the pandemic. This meant Working Tax Credit payments were not lowered but these special rules ended from October 1 and the Low Incomes Tax Reform Group (LITRG) has warned the current guidance is “misleading for some claimants”.

LITRG said a complex series of rules replaced them for claimants who were still not able to resume their usual working hours (or the level needed to qualify for Working Tax Credit) as a result of the pandemic.

For people in this situation, the new rules mean the point at which a claimant needs to notify HMRC about their situation depends on whether they expect their hours to return to the level needed to claim Working Tax Credit by November 25 2021.

If they do expect to reach the required level by November 25, they do not need to do anything immediately, and only need to tell HMRC on November 25 if their hours do not return to the required level.

However, at any point from October 1, 2021, if they do not expect their hours to reach the required level by November 25, 2021, even if the situation is temporary, they must inform HMRC immediately as HMRC are treating that as a permanent change. Their Working Tax Credits will then continue for a further four weeks before ending.

READ MORE: HM Treasury introduces 2 new taxes in Finance Bill – full details

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