Tax credits renewal deadline looming
Universal Credit (UC) is replacing the old tax credits system slowly but surely. However, tax credits are still applicable to existing claimants. Why is July a crucial month for recipients?
Where an individual or couple is in receipt of Working Tax Credits and/or Child Tax Credits, they will be unaffected by the UC rollout until they:
- choose to make a claim for UC
- need to claim another benefit that UC has replaced, such as housing benefit; or
- have a change of circumstances that ends the tax credits claim and they need to make a new claim for support.
Until then, the old system of claiming and renewing needs to be followed. In some cases, the renewal will be automatic and the claimant will simply receive a renewal notification. But some claimants need to complete a renewal pack, which is sent out in June each year. In a 1 July press release HMRC stated that just under 500,000 forms were outstanding, and emphasised that these must be completed by 31 July in order to continue receiving payments.
Any changes in circumstances must be reported. However, the press release confirmed that employed claimants do not need to report any temporary falls in their working hours as a result of coronavirus. They will be treated as if they are working their normal hours for up to eight weeks after the furlough scheme closes. Grant payments received under the Self-Employment Income Support Scheme do need to be reported though.
Related Topics
-
Practical guide: Tax-efficient will planning with residential property
An individual has a significant property portfolio which provides them with their sole source of income. They want to gift shares in some property to their daughter but retain the income. Can they do this without triggering the reservation of benefit rules?
-
Will HMRC treat late processed invoices as errors?
Your business processes invoices when they have been approved by budget holders, so some will be processed a month late, delaying your input tax claim. How might HMRC’s updated guidance help here?
-
Are redundancy payments tax deductible?
A seemingly simple question we’re often asked is how much tax relief a business is entitled to for redundancy payments. The answer is that it depends on the situation. How might the circumstances of a redundancy affect the tax deduction?