Tax credits are essentially a government scheme that gives extra money to those who need it (e.g. those who need help to care for children, disabled workers, and people on low incomes). There are two types of tax credit – child tax credit and working tax credit.
The Covid-19 crisis has meant a reduction in the number and availability of HMRC staff dealing with every aspect of the organisation’s work. To remove the burden on tax credits customers, most tax credit renewals this year have been served an ‘Auto Renewal’ notice.
However, HMRC have realised that the notice issued to a number of customers was missing some of the income information used to calculate the award. Consequently, they have written to those affected and telling them what is missing.
However, even if they have been selected for auto-renewal this year, the self-employed who get tax credits must, as usual, confirm their actual or estimated income by 31 July 2020, otherwise HMRC will finalise their award using the information they hold, and they will not be able to change it at a later date.
Typically, self-employed customers provide an estimate of income, but they will need to contact HMRC again when they know their actual income and by 31 January 2021.
If you are unsure about any of this, here’s how to contact HMRC.
Julie Downie, Accounts Manager