Act quickly to get your tax credits reinstated

The Low Incomes Tax Reform Group (LITRG) is urging people who missed the 31 July tax credits renewals deadline to contact HMRC urgently to restart their tax credit payments.

Meeting the 31 July deadline was crucial for those who were told to contact HMRC to renew their tax credits. HMRC stop tax credit payments to people who were required to reply and who missed the deadline. These people will receive a Statement of Account letter from HMRC. This letter will explain that HMRC have stopped their payments and will ask them to pay back all the tax credits paid since the start of the 2021/22 tax year (that is, from 6 April 2021).¹ If this happens, all is not lost, but you need to act quickly, advises LITRG.

Head of LITRG Victoria Todd said:

“We urge people to contact HMRC as soon as possible if they have missed the 31 July deadline.

“If HMRC have stopped their payments, provided they contact HMRC within 30 days of the date on their Statement of Account letter and complete their renewal, HMRC will process the renewal and reinstate their 2021/22 claim back to 6 April 2021.

“People who are self-employed and do not yet have final details for the 2020/21 tax year must still give an estimate and then either confirm the estimate, or file actual figures, by 31 January 2022.”

If someone misses this 30-day deadline, they can only renew and secure their claim for 2021/22 if they complete their renewal by 31 January 2022 and can satisfy HMRC that they had ‘good cause’ for missing both the 31 July deadline and the extra 30-day deadline.

Victoria Todd said:

“If someone misses the extra 30-day deadline and does not satisfy HMRC that they have ‘good cause’ for being late, HMRC will ask them to repay all tax credit payments made to them from the start of the tax year and they will not renew the tax credit claim.

“Now that universal credit has been introduced across the UK, HMRC state that most people can no longer make new tax credit claims². Therefore, it is even more important that people act quickly to renew their claim if they have missed the 31 July deadline and received a Statement of Account letter from HMRC.

“The interactions between universal credit and tax credits are complicated. If a claimant misses the additional deadlines, we advise that they get some welfare rights advice³ as soon as possible and before they submit a claim for universal credit to understand fully their position and options for next steps.”⁴