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Did you miss the tax credit renewals deadline (31 July 2020)?

Published on 13 August 2020

Tax credit awards last for a maximum of one tax year (6 April to following 5 April). When you claim, your award is based on your circumstances for the year you claim and your income for the previous tax year. This is your initial award and the payments are provisional.

Tax credits written on a sticky note stuck on a calendar
(c) Shutterstock / Vitalii Vodolazskyi

After the tax year ends, HMRC use a ‘renewals process’ to confirm your income and your circumstances for the tax year just ended. This allows them to finalise your entitlement for the year just ended and to set up your claim for the new tax year.

This year, the majority of claims have been auto-renewed. Only a small number of people will have been asked to contact HMRC to complete their declaration by 31 July 2020 in order to renew their claims. You can read more about the renewals process and the different renewal types in our recent web article.

This article explains what to do if you were required to provide your income to HMRC by 31 July but you missed the deadline.

I missed the 31 July deadline. What happens next?

If you were required to contact HMRC by 31 July to declare your income and circumstances (your renewal paperwork will have included a red line across it) and you did not do so, HMRC will stop your tax credit payments. They will also ask you to pay back all payments made to you from 6 April. This is because failure to renew means that there is no new claim for the 2020/21 tax year. Consequently, any payments received from 6 April 2020 will be overpaid (because there is no claim).

I missed the deadline and my tax credit payments have stopped, can I get them re-started?

If your payments have stopped you should receive a letter from HMRC (called a statement of account) saying you need to repay all payments you have had since 6 April. If you contact HMRC within 30 days of the date on that letter, HMRC can complete your renewal and re-instate your tax credits.

If you miss this 30-day deadline, then HMRC can only reinstate your payments from 6 April if you had good cause for missing the deadline and you contact them by 31 January 2021.

If your claim cannot be restored, all provisional payments paid to you from 6 April 2020 will be treated as overpaid, and you will have to make a fresh claim which can only be backdated by 31 days.

Now that universal credit (UC) is available across the UK, most people are no longer able to make a new claim for tax credits, see Who can claim tax credits?. However, if you have been receiving tax credits and have been sent your renewal pack then, providing you renew within 30 days of the statement of account, you will be able to have your claim for tax credits accepted. If you renew by 31 January 2021 and HMRC accept that you have good cause for missing the 31 July 2020 deadline and the additional 30 day restore period, they will reinstate your tax credit renewal claim from the previous 6 April or, if you have claimed UC in the meantime, up until the day before your UC award starts.

I got an auto-renewal pack this year. I didn’t contact HMRC but everything in my renewal documents looked correct, should I do anything?

No, as long as you checked the information about you was correct, HMRC will finalise your award for 2019/20 and set up your claim for 2020/21. Unless there is a change, HMRC won’t send you a new award notice for 2020/2021 because details of your new award will be shown in your renewal paperwork. You can also use HMRC’s on-line tax credits service via the GOV.UK website to check your award and your payments.

Contact: Jane Booth (click here to Contact Us)
(First published: 13/08/20)

 

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