Two weeks left until major change to working tax credits – make sure you don’t get caught out

ANYONE who gets working tax credits will soon need to let HMRC know about changes to their work.

During the coronavirus pandemic, many people saw their working hours change and millions of people were furloughed.

A change to working hours when claiming tax credits would normally need to be reported to HMRC.

But the government said that temporary changes because of Covid did not need to be logged.

A worker whose hours fell temporarily as a result of the pandemic would have been treated as though they were still working their normal hours.

But now that concession will end and from November 25, anyone getting working tax credits who has a change to their working hours will need to let HMRC know.

Working tax credits are for those who are earning a low income from work and nearly 2 million Brits get it.

The amount you get is affected by the hours you work, so changes after November 25 could see your tax credits go up or down, depending on the change.

If you don't report any changes after this date, you could be hit with a £300 fine, which can increase by up to £60 a day if you don't pay it.

Myrtle Lloyd, HMRC’s director general for customer services, previously said: “We introduced this measure last year to help support working families.

"It is vital that Working Tax Credit claimants update HMRC with their working hours if they have reduced and won’t return to their normal level before November 25. "

If your hours are already back to normal or will return to normal before the cut off date, you don't have to do anything.

But if they change after November 25, you'll have the usual one-month window to declare the fact in your working tax credit claim.

You should also continue to tell HMRC about any permanent changes to your circumstances within the same timeframe of one month.

So if you've been made redundant, lost your job or your hours change permanently, you'll need to update details too.

That way HMRC can be sure that claimants are getting the right amount of tax credits.

If you get more than you're entitled to, you could have to pay the money back later.

How do I report tax credit changes to HMRC?

You can report changes online on the government's website in the same place you'll be able to find your current working tax credit details.

You can also contact HMRC on 0345 300 3900 for questions about tax credits.

If you receive tax credits you're not actually entitled to you will be urged to repay the money, so it's a good idea to make sure all your details are up to date to avoid any further penalties.

You have a month to do this after the November 25 cut off, so after December 25, 2021, you might find you incur the penalty for failing to do so.

Anyone who receives tax credits must remember to renew them every year too, or miss losing out on thousands of pounds.

Meanwhile a major change to Universal Credit will take place on November 24, allowing working Brits to keep more of what they earn.

Thousands of Brits on new style ESA and JSA can now have their benefits stopped as they are subject to sanctions for the first time.

 

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