HMRC tax credit renewal packs: act quickly to avoid losing benefit payments

If you are currently receiving tax credits, then you will have to renew to continue getting the benefit. The government will soon be sending out renewal packs - we explain what you need to do and when. 

Tax credits are payments made to those on low incomes and with disabilities intended to help with day-to-day living costs. But how much you receive is renewed on a yearly basis, which is why it is important you update your information before the July deadline.

The basic amount you can receive through working tax credits is up to £2,280 a year, and up to £3,480 a year in child tax credits for your first child.

Over 1.5 million people currently claim tax credits - we have all the details on how to make sure you do not miss out on future tax credit payments. 

When will I get my tax credit renewal pack?

Annual tax credit renewal packs will be sent to over 1.5m households from next month - between 2 May and 25 June.

When you get your pack, you need to respond to HMRC to verify your circumstances for the upcoming year. 

You risk having your payments stopped if you do not reply by 31 July. With ongoing price hikes, more than 500,000 families will be asked to fill out the pack to ensure they are receiving the support they are entitled to.

You will receive one of two types of renewal packs -  one has a red line across the first page and says “reply now” and the other has a black line across the first page and says “check now”.

If you get the one with a red line, you need to confirm your circumstances to renew your tax credits.

If you get one with a black line across the first page, you will need to check that the details are correct. If they are, you do not need to do anything and your tax credits will be automatically renewed.

What happens if I do not get a tax credit renewal pack?

The packs will be sent out in batches. HMRC said you should wait until after 15 June to receive it, but after that, you should contact HMRC.

You can also renew your tax credits on the HMRC app, available on both Android and iOS. 

Will my tax credits stay the same?

Circumstances that could affect tax credits payments include changes to living arrangements, childcare, working hours or income.

Myrtle Lloyd, HMRC’s director-general for customer services, said: “Tax credits provide families with vital financial support, so it is important that customers look out for their renewal pack and renew by 31 July.”

Will my benefits move to Universal Credit?

It is worth noting that tax credits will eventually switch over to Universal Credit.

This is due to be completed by the end of 2024. You will be contacted by the Department for Work and Pensions (DWP) when your benefits are moved to Universal Credit.

Universal Credit was introduced in 2013 to gradually replace the older benefit system. 

As well as child and working tax credits, four other benefits are being moved to Universal Credit. These are:

• Housing Benefit
• Income-related Employment and Support Allowance (ESA)
• Income-based Jobseeker’s Allowance (JSA)
• Income Support

If you currently receive one or more of these benefits, you can stay on them for now unless you are contacted by the DWP telling you to switch to Universal Credit.

You may also have to migrate over if your situation changes, such as if you have separated from a partner or moved to a different council authority.

In either of these cases, you will be contacted by the DWP and told what to do.

But, you do not have to wait for a letter - you can apply to move to Universal Credit now.

To apply, visit the government’s Universal Credit portal (you will need an email address and a mobile phone).

To be eligible for Universal Credit, you must:

• Be aged 18 or over
• Be under the age for receiving your state pension
• Be a UK resident
• Have less than £16,000 in savings

If you are currently receiving benefits, it’s important to check which regime you’ll be better off under. If you apply for Universal Credit, you will lose any existing benefits and you won’t be able to go back to them in the future. 

You can get in touch with Citizens Advice for guidance. Their advisers can talk to you about your Universal Credit application and go over if you’ll be better off remaining on the older benefits system until the system is entirely switched over. 

Who can claim tax credits?

To qualify for tax credits, you must be on a low income and work at least 16 hours a week. What constitutes “low income” is dependent on your circumstances, such as your age, what other benefits you receive, what help with childcare costs you are eligible for and whether you are from the UK.

Those who have reached the state pension age cannot make a new claim for working tax credit but could claim pension credit - you can read more about pension credit eligibility on our sister site MoneyWeek.

Make sure you’re not missing out on other benefits either - take a look at Turn2us benefits calculator to check. 

Additional reporting: PA