HMRC could cut benefits for thousands at risk of missing July deadline

Around 730,000 individuals on Tax Credits received their annual renewal pack in the post from HM Revenue and Customs (HMRC) last month. However, not everyone will need to act upon this.

According to HMRC, the majority of Tax Credit claims will be renewed automatically - these are the notices with a black stripe. Those who receive a notice with a red stripe will need to renew.

It's estimated that approximately 10,000 people will need to verify their information and renew their claim before the deadline at the end of this month. HMRC has issued a warning that anyone failing to renew their Tax Credit claim by 11.59pm on July 31, 2024, could see their payments cease.

The most straightforward and quickest method for individuals to renew their Tax Credits is via GOV.UK or the free and secure HMRC app. This also allows users to track their claim and find out when they can expect payments.

Change of circumstances

If there is a change in someone's circumstances that could affect their Tax Credits claims, they must report the changes to HMRC, reports the Daily Record.

It includes:

• Living arrangements

• Relationship changes

• Childcare

• Children leaving home

• Working hours

• Income - increase or decrease

A full list of what changes need to be reported can be found on GOV.UK.

HMRC warning for missing renewal deadline

HMRC warns that customers who fail to renew by the deadline on July 31 risk their payments being stopped and having to repay any overpayments. The 2024 to 2025 Tax Credits notices may show predicted payments for the tax year 2025 to 2026 - these are automatically generated and should be disregarded.

It's crucial to note that Tax Credits will cease on 5 April 2025 and will be replaced by Universal Credit. The Department for Work and Pensions (DWP) will issue a Migration Notice when it's time to claim Universal Credit.

The DWP has released a schedule earlier this year indicating when Tax Credit recipients can expect to receive a Managed Migration Notice. Those who fail to respond within three months of receiving the letter risk losing their current benefits.

Here's a breakdown of when you're likely to be asked to move to Universal Credit:

DWP guidance, as seen on GOV. UK, states: "It is important that you do not do anything until you receive your letter. You will not be moved automatically. Once you've received your Universal Credit Migration Notice letter, you'll need to make a claim for Universal Credit to continue to get financial support.

"There will be a deadline in your letter. This is three months from the date the letter was sent out. Your current benefits will end as soon as you submit your claim for Universal Credit and you will not be able to go back to your existing benefit once you have claimed."

Transitional Protection Payments

Transitional Protection Payments are an extra measure designed to aid your transition to Universal Credit by compensating if your entitlement under this system is less than what you were previously receiving via tax credits or other benefits.

If eligible, this protection means you can:

• get a Transitional Protection payment added to your Universal Credit entitlement if you receive more from your previous Tax Credits or benefits

• claim Universal Credit and have money, savings and investments over £16,000 for 12 assessment periods, if you receive Tax Credits

• claim Universal Credit if you’re a full-time student in higher education until you or your partner finish the course

You won't have to apply for Transitional Protection. However, to be eligible, your claim for Universal Credit must be lodged before your Migration Notice's specified deadline.

This notice, originating from the DWP, gives you the necessary details about claiming Universal Your next step towards claiming can be taken by applying online directly, contacting the free Universal Credit Migration Notice helpline on 0800 169 0328, or by going to your local Jobcentre Plus. For those requiring extra assistance to finish their application, Citizens Advice Scotland's Help to Claim service offers free, confidential and impartial advice, along with a comprehensive guide to the claims procedure.

More information can be found on their website.