HM Revenue and Customs (HMRC) has revealed that approximately 730,000 individuals on Tax Credits will receive their annual renewal pack in the post before June 19. However, not everyone will need to act upon this.
HMRC stated that the majority of Tax Credit claims will be automatically renewed – these will be the notices with a black stripe on them – while those who receive a notice with a red stripe will need to renew.
Nonetheless, it is estimated that around 10,000 people will need to verify their information and renew their claim. HMRC cautioned that anyone who fails to renew their Tax Credit claim by the deadline on July 31, 2024 could see payments cease. The most straightforward and convenient way for individuals to renew their Tax Credits is on GOV.UK or via the free and secure HMRC app, which also enables customers to monitor their claim and find out when they can anticipate payments.
Change of circumstances
If there is a change in someone’s circumstances that could impact their Tax Credits claims, they must report the changes to HMRC, reports the Daily Record.
These include:
- Living arrangements
- Relationship changes
- Childcare
- Children leaving home
- Working hours
- Income – increase or decrease
A comprehensive list of what changes need to be reported can be found on GOV.UK here.
Missing the deadline
HMRC warns that customers who fail to renew by the deadline on July 31 risk their payments being stopped and having to repay any overpayments.
The 2024 to 2025 Tax Credits notices may show predicted payments for the tax year 2025 to 2026 – these are automatically generated and should be disregarded.
Tax credits will be discontinued on April 5, 2025 and are set to be replaced by Universal Credit, as stated by the Department for Work and Pensions (DWP). Claimants will receive a Migration Notice sharing when it’s time to claim Universal Credit.
The DWP has also provided a schedule for when individuals can anticipate receiving a Managed Migration Notice, cautioning that those who fail to respond within three months could lose their current benefits.
| Legacy Benefit | Manage Migration Letters Issued |
|
Tax credits with Housing Benefit |
From April 2024 |
|
Income Support only |
From April 2024 |
|
Income Support with Housing Benefit |
From April 2024 |
|
Income Support with Tax credits |
From April 2024 |
|
Income Support with Housing Benefit |
From April 2024 |
|
Housing Benefits only |
From June 2024 |
|
Income-related ESA with Child Tax credits |
From July 2024 |
|
Tax credits (pension age) |
From August 2024 |
|
Income-based Jobseekers Allowance |
From September 2024 |
|
ESA only |
You will not be asked to move to Universal Credit until a later date |
|
ESA with Housing Benefit |
You will not be asked to move to Universal Credit until a later date |
Those claiming tax credits alongside Housing Benefit should expect their notice from April 2024. The same timeline is applicable for those solely on Income Support or those combining it with either Housing Benefit or Tax Credits.
Letters should also be anticipated from April 2024 for those only on Housing benefits or Income-related ESA with Child Tax credits. On the other hand, pension-aged tax credit claimants and those on income-based Jobseekers Allowance should prep for September 2024.
ESA-only claimants along with those on ESA with Housing Benefit haven’t had a date set yet as to when they will be shifted onto Universal Credit. The DWP strongly advises against taking any action until receipt of the relevant letter. GOV.UK asserts: “It is important that you do not do anything until you receive your letter. You will not be moved automatically. Once you’ve received your Universal Credit Migration Notice letter, you’ll need to make a claim for Universal Credit to continue to get financial support. There will be a deadline in your letter.
“This is three months from the date the letter was sent out. Your current benefits will end as soon as you submit your claim for Universal Credit and you will not be able to go back to your existing benefit once you have claimed.”
Transitional Protection Payments
An additional amount, the Transitional Protection payments, will assist with your transition to Universal Credit. These payments are designed to bridge any gap if your Universal Credit entitlement is less than your prior tax credits or benefits.
Eligibility to receive this protection provides the following benefits:
- get a Transitional Protection payment added to your Universal Credit entitlement if you receive more from your previous Tax Credits or benefits
- claim Universal Credit and have money, savings and investments over £16,000 for 12 assessment periods, if you receive Tax Credits
- claim Universal Credit if you’re a full-time student in higher education until you or your partner finish the course
Eligibility for Transitional Protection
There’s no need for an application for Transitional Protection – however, to qualify, a claim for Universal Credit before the deadline date on the Migration Notice letter is necessary.
A Migration Notice letter from the DWP will invite you to place a claim for Universal Credit.
Claims for Universal Credit can be made directly online, via the dedicated Universal Credit Migration Notice helpline at no cost by calling 0800 169 0328, or in person at your local Jobcentre Plus.
For those requiring extra guidance to complete their application, Citizens Advice Scotland’s Help to Claim service offers free, confidential, and unbiased advice, along with a step-by-step guide to the termination process.
Find out more on their website here.
