Tax credits renewal deadline 31 July 2016

The renewals process and what claimants need to do 

The deadline for renewing tax credits is 31 July 2016. All those claiming working tax credit (WTC) and/or child tax credit (CTC) should check what action they may need to take. 

The renewal process does two things: it gives HMRC the information to finalise tax credit awards for last year, 2015/16, and it renews the claim for the current year, 2016/17.

Anyone who claimed tax credits in 2015/16 should have been sent a renewal pack and most people will need to respond to HMRC. Even if you do not intend to renew your claim for the current year, you must still make sure HMRC has correct information on your 2015/16 income and circumstances in order to finalise last year’s award.

How to renew
The renewal pack contains a statement of 2015/16 tax credits plus guidance notes. Most people will be required to contact HMRC in response to their renewal pack. Some (known as ‘auto renewal’ cases) need only check that the information is correct – if it is, their claim will renew automatically, but if it is incorrect they must contact HMRC. It will be clear from the pack which category you fall into.

For claimants who are employed, HMRC uses income from the Real Time Information PAYE system to populate the tax credits renewal statement. However, it is still important to check the figures, as it is not unknown for the payroll information supplied via RTI to be incorrect.

If you do not have final income figures for 2015/16 – for example, you are self-employed and do not yet have final accounts – you can use estimates to make the renewal in time for the deadline.

Tax credits can be renewed online – see Manage your tax credits. Bbefore using the online service, claimants have to register with the Government Gateway.

Credits can also be renewed over the telephone or by sending back the paper form included in the renewal pack – see How to renew tax credits for details.

In a joint claim, one partner can renew on behalf of both of them.

If you miss the deadline
If you miss the 31 July deadline, your tax credit payments for 2016/17 will not be renewed and will stop. But all is not lost, as they won’t stop immediately – HMRC will send a notice (called a Statement of Account) telling you that your payments are going to be stopped, and if you renew within 30 days of this, your 2016/17 award should be restored. Even if you miss the 30-day window, you can restore your 2016/17 award if you have ‘good cause’ for missing the deadline and renew by 31 January 2017.

However, it is much safer to meet the 31 July deadline in the first place. If you do not renew successfully you will have to make a new claim, which can only be backdated by one month, and will have to repay the provisional payments made to you since April 2016. There is also the risk of a penalty for failing to comply with the renewal requirements.

If you renewed using estimated figures you should provide final figures by the final renewal deadline of 31 January 2017.

More information
There is useful guidance on tax credit renewals on the Low Incomes Tax Reform Group website.

For advisers, has detailed guidance on all aspects of tax creditsincluding renewals