Families are being warned to renew their tax credits to avoid losing out on support for essential payments such as food and childcare.
HM Revenue and Customs (HMRC) is issuing 2.5million renewal packs to tax credit claimants from this week, advising households to update their details by July 31.
According to the tax authority, failing to renew could mean your payments are terminated - and you might even have to repay the money you've received since April 2020.
Tax credits are paid to people who are registered as disabled, on low incomes or have children that are dependent on them.
There are two types - working tax and child tax credit.
While the majority of people who have received tax credits in the past are now on Universal Credit, many people, including those with severe disabilities are still on the legacy benefit.
In most cases, they'll be paid to parents/guardians who work between 16 and 24 hours a week.
Tax credit claimants have to renew their tax credits by July 31.
The rates vary depending on your personal situation, but you can get up to £3,240 for working tax credit or up to £3,435 for child tax credit.
People that need to check their details will receive a letter from HMRC with a black line and the words “reply now” on it.
If all your details are correct, you don’t need to do anything - your tax credits will automatically be renewed.
However, if there’s a change in your circumstances, then you’ll need to tell HMRC about it.
You’ll need information on your income for the last tax year, which ran from April 6, 2020 to April 5, 2021.
You should receive your renewal pack by June 4.
If you miss the deadline your tax credits payments will stop.
HMRC will then send you a letter, which will say TC607 on it, and you'll have to pay back the tax credits you’ve received since April 6 this year.
For working tax credit, you are entitled to a basic amount worth up to £2,005 a year, and you might get extras on top, for example, a single parent could get up to £2,060 a year.
For child tax credits, the amount you are entitled to depends on your children.
If your kids were born before April 6, 2017, you could get the ‘child element’ of child tax credit for all of them. This is in addition to the basic amount, known as the ‘family element’.
If any of your children were born on or after April 6, 2017, you could get the child element for up to two of them.
How to renew your tax credits
Renew online at Gov.uk, here
Via the HMRC app, which is available on the App Store or Google Play Store
Via the online forum (click on Tax Credits and You)
Through HMRC’s webchat help service
By calling the tax credits helpline: 0345 300 3900
