Tax credit update: How to renew your payments after missing the deadline

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The Low Incomes Tax Reform Group (LITRG) is urging anyone who missed this date to contact HMRC to start the process of renewing their payments.

Tax credits are a form of financial assistance from the Government to people who are in need of it, including people with disabilities and on a low income.

For people in the UK, there are two unique forms of tax credit: child tax credit and working tax credit.

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Child tax credit is paid to anyone who has children and is in need of help. Payments are received in addition to child benefit and claimants do not have to be working to get it.

Working tax credit is given to Brits who work but are on low income. Self-employed people are eligible for this support.

While it is considered a form of benefit, tax credits are calculated as a yearly amount, which is paid in either weekly or monthly installments.

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As well as this, tax credits are given out through HMRC, whereas other benefits are dealt with through the Department of Work and Pensions (DWP), such as Universal Credit.

HMRC calculates tax credits depending on the total taxable income of a claimant and their partner, hours worked by the claimant, whether they have a disability or if they need child care.

READ MORE: State pension: Sunak could launch ‘double tax assault’ costing savers £2,000 a year

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Last month, HMRC issued a warning the week before the deadline reminding more than 300,000 tax credits customers they still needed to renew their claims.

If this deadline was missed, now former claimants will receive a Statement of Account letter from HMRC to their primary address.

This letter will outline why the payments have stopped and ask that all tax credits since the start of the tax year, which is April 6, are paid back.

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In response to these letters being sent out, LITRG are explaining what people can do to renew their tax credit claim after the deadline.

DON’T MISS

According to Victoria Todd, the Head of the tax advocacy group, there is a way of getting payments after last month’s deadline.

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She said: “We urge people to contact HMRC as soon as possible if they have missed the July 31 deadline.

“If HMRC have stopped their payments, provided they contact HMRC within 30 days of the date on their Statement of Account letter and complete their renewal, HMRC will process the renewal and reinstate their 2021/22 claim back to 6 April 2021.

“People who are self-employed and do not yet have final details for the 2020/21 tax year must still give an estimate and then either confirm the estimate, or file actual figures, by 31 January 2022.”

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It should be noted if anyone misses this 30-day deadline, it is only possible to renew a claim successfully for the next tax year if they complete it by January 31 2022 .

Furthermore, they must convince HMRC that they had ‘good cause’ for missing all the deadlines.

On top of this, Ms Todd says that the introduction of Universal Credit to the benefits system has changed the eligibility of tax credits for some people.

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“If someone misses the extra 30-day deadline and does not satisfy HMRC that they have ‘good cause’ for being late, HMRC will ask them to repay all tax credit payments made to them from the start of the tax year and they will not renew the tax credit claim,” she explained.

“Now that universal credit has been introduced across the UK, HMRC states that most people can no longer make new tax credit claims.

“Therefore, it is even more important that people act quickly to renew their claim if they have missed the deadline and received a Statement of Account letter from HMRC. The interactions between Universal credit and tax credits are complicated.

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“If a claimant misses the additional deadlines, we advise that they get some welfare rights advice as soon as possible and before they submit a claim for Universal Credit to fully understand their position and options for next steps.”

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