HMRC has simplified the tax credits renewal process this year but has made an error in the process. What steps should you take if your tax credits renewal pack includes incorrect data?
Tax credits renewals
HMRC will automatically renew all tax credits claims this year, apart from claims it believes are high risk. This means that the majority of claims renewals require no input from taxpayers. The trouble is that in many cases the information HMRC is using appears to be incorrect.
What’s the problem?
HMRC says that it sent around one million tax credits renewal packs ( TC603R ) which excluded some or all of the income information. The error will affect you if you have self-employed income, receive taxable social security benefits or other income, e.g. dividends or other investment income. HMRC says the error has not affected tax credits payments made since the start of April but it potentially affects future payments.
Going forward
Since the last week of June 2020 HMRC has been writing to all those affected asking for the information it needs to check and renew their tax credit claims. It has also sent a text message to some inviting them to get in touch – if you’ve received one don’t mistake it for one of the many scam texts claiming to be from HMRC.
What should you do?
To make sure your tax credits are correct you must review your total household income for the 2019/20 tax year and check it against HMRC’s figures. If you’re self-employed and haven’t yet submitted your tax return for last year (2019/20), provide HMRC with an estimate of your profit or loss by 31 July 2020 or it will finalise your claim on the potentially incorrect information it has.
Tip
The simplest and quickest way to report any changes needed to HMRC’s figures is to complete the tax credits renewal form online or by using its webchat service (see The next step).
If you’re self-employed, receive taxable state benefits or have investments, HMRC might be working from the wrong income figures. You need to provide it with correct income figures for 2019/20 by 31 July 2020.
The next step
To HMRC’s tax credits webchat
To HMRC’s online renewal form
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.