The Low Income Tax Reform Group (LITRG) has warned that hundreds of thousands of tax credit claimants, who had their claims auto-renewed last year due to the pandemic, will have to complete and return renewal declaration forms this year by 31 July 2021 or lose their entitlement.
The group has also reminded those renewing their claims to check all coronavirus-related payments they have received to see if they count as income for tax credits.
HMRC auto-renewed most claims in 2020 because of the impacts of Covid-19, however it will not be done this year. It means more people will be receiving “reply require” renewals this year.
The group is also urging people to check their circumstances carefully as various concessions in the rules were introduced during the 2020/21 tax year to help with the impacts of the Covid-19 outbreak. For example temporary reductions were introduced to usual hours of work.
Victoria Todd, head of LITRG, said: “We are concerned that some people may wrongly assume that their tax credits will be renewed automatically this year and that there will be potential confusion about the various Covid-19 payments, whether they count as income for tax credits and how they should be declared.
“Whatever type of renewal pack HMRC sends you, make sure you follow the instructions and complete any actions by 31 July 2021. It is especially important this year to check your income carefully and make sure any COVID-19 support payments that you received have been properly declared.”
She added: “If you do not yet have your actual income figure for 2020/21, it’s very important that you provide HMRC with an estimate of your 2020/21 income by 31 July 2021 and you will then have until 31 January 2022 to provide them with your actual figure.LITRF