There’s less than a month to renew tax credit claims for the year ahead. Why is more care needed this time round?
Tax credit claims need to be renewed annually in order for payments to be maintained. The deadline is 31 July each year, and so anyone who hasn’t already sent the paperwork in should be doing so as a matter of urgency. However, this year’s renewal pack contains a prompt to consider switching to Universal Credit (UC) instead.
UC is slowly replacing tax credits. It’s no longer possible to make a new claim for tax credits, and by the end of 2024 existing claimants will be moved onto UC. Anyone who is in receipt of tax credits can opt to switch to UC now, and it can be a good idea as it can mean the amount received increases. However, it is essential to ensure this will be the case, as it isn’t possible to switch back. A good starting point is the benefits calculators on GOV.UK, but we strongly recommend consulting an independent advisor, e.g. from the Citizens Advice service, before making a decision.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.