Your tax credits are awarded for a tax year. You are required to renew your claim after the end of each year so that your payments will continue. HMRC need to check whether they have paid you the right money during the year and whether they will carry on paying you the same amount of money going forward.
The Tax Credits Cycle
When you first make a claim for tax credits, any payments you get are based on your income from the last tax year, and your current personal circumstances. A tax year runs from 6 April one year to 5 April the next. So if you're making a claim because you've just had a baby, HMRC will take this into account along with your income for the year that ended on 5 April 2009.
The tax credit payments you get throughout the year are temporary or 'provisional' until you confirm your actual income and circumstances as part of the renewals process.
It is important that you tell HMRC about any changes to your circumstances straight away as it could affect the amount of money you should be getting. For example, you must tell them within one month if you split up from your partner, or if you start working fewer hours. Otherwise you might not get all the money you should - or you may end up getting too much and may have to pay it back.
When you tell them about a change, they will send you an award notice confirming the new information provided by you, and any changes to your payments. It is important that you check each award notice you get carefully using the checklist that came with it, and let them know if anything is incomplete, missing or wrong within one month.
After the end of each year they ask you to renew - or in some cases they will automatically renew your claim. This helps them to check that the payments we've made to you are correct, and to set your payments for the coming year.
Sometimes they will have paid you too much (an overpayment) or not enough (an underpayment). If this happens, they will either make an adjustment to your payments, or if you have been paid too much but you're no longer getting tax credits, they will ask you to make a direct payment - a one off payment for the full amount.
Why Is It Important To Renew?
It's important to renew so that you can:
· check that we have the right information
· make sure your income is still within the limits for getting tax credits
· tell HMRC if anything has changed
· continue to get all the money you're entitled to
If you don't renew your tax credits, you may only receive payments for a limited period after the end of the tax year and you'll have to repay any overpayment from the previous year as well as any money paid to you since 6 April.
How To Renew
HMRC will send you a renewal pack between April and June which you must respond to. You don't have to complete any paperwork if you don't want to, you can renew by phone.
The renewal pack includes an Annual Review notice which tells you what to do to renew your tax credits. Most people will also get an Annual Declaration form in their pack as well.
It's important you read the Annual Review notice carefully - it will tell you how to renew your tax credits.
You must:
· check the information provided on your Annual Review notice
· tell HMRC if anything has changed
You may also be asked to give details of your income in the last tax year on the Annual Declaration form.
You can return the information by either:
· calling the Tax Credit Helpline on 0845 300 3900
· completing the Annual Declaration form - if you were sent one, and returning it in the envelope provided.
If you've only got an Annual Review notice, you don't need to do anything if:
· nothing has changed in your personal situation
· your income is still in the limits shown in the notice
· there are no mistakes or missing details in the notice
Your tax credits will be automatically renewed.
Who Will Receive A Renewal Pack?
You will receive a renewal pack even if you claimed tax credits but didn't get them because your income is too high (a nil award), and even if you only got tax credits for part of the year.
If you have made more than one tax credits claim during the year, you will be sent a separate renewal pack for each claim. You must fill in each one separately.
What Happens If You Don't Renew?
If you don't renew, your payments will stop and you will have to pay back any overpayment from the previous year as well as any money paid to you since 6 April.
The deadline for all replies is shown on your Annual Review form - usually 31 July. Don't wait for the deadline. The sooner you check your details and tell HMRC of any changes, the sooner they can make sure you get the money you're entitled to.
Why You Need To Tell HMRC About Changes
You should tell them about changes in your personal circumstances straight away. You could lose money if you don't as tax credits can only be backdated by up to three months. For example if you have a baby on 12 June, but do not tell us until 12 October, we will only backdate your payments until 12 July.
Contact the Tax Credit Office
If you need more help you can call the Tax Credit Helpline, which is open from 8.00 am to 8.00 pm every day except Christmas Day, Boxing Day, and New Year's Day. The numbers you can ring are:
· telephone 0845 300 3900
· textphone 0845 300 3909 - if you are deaf or have a hearing or speech impairment.
If you’re calling from overseas you can also contact the Tax Credit Office on Tel + 44 289 053 8192.
As many of you may have heard, there is a new mobile phone directory being introduced shortly, called; '118 800'.
