08 May 2024

HMRC sending tax credit renewal letters – what to do if you get one

Around 10,000 claimants will need to take action or risk having payments stopped

If you receive tax credits, look out for a renewal pack in the post. HMRC is sending them to all claimants between now and 19 June 2024.

While the majority of people don't have to do anything to keep claiming, thousands will need to reply to the tax office by the date shown in their letter, or risk having their payments stopped.

Here, Which? explains how to renew your claim to avoid missing out on government support, plus the other tax letters to watch out for this month.

Who needs to renew?

Tax credits are government payments given to people who are on low incomes, are registered as disabled or have children that are dependent on them. There are two types: child tax credit and working tax credit.

Around 730,000 customers who are currently receiving one or both forms of tax credit will receive an information pack in the post soon. Letters with a black line across the first page are automatically renewed and all you need to do is check the details are correct.

But if you are one of the 10,000 claimants receiving a notice with a red line, then you'll need to reply to HMRC, confirming your details are up to date. That includes living arrangements, childcare, working hours, or income increase/decrease.

How to renew your claim

Taxpayers have until 31 July to report any change in circumstances to HMRC.

You can renew your tax credits claim on the government website by searching 'manage my tax credits' or using the HMRC app. Alternatively, you can call HMRC on 0345 300 3900.

You'll need the following information to hand before you get started:

Your National Insurance number.
Details about any changes to your circumstances – eg if your salary has changed.
The 15-digit reference number on your renewal pack.
Your total income for the last tax year. If you're applying for tax credits as a couple, you'll need to provide how much your partner earned too.

If you haven't received a renewal pack by 15 June, then you should contact HMRC to ask for one.

What happens if you don't take action?

Failure to reply to HMRC by the deadline could result in payments being stopped for the 2024-25 financial year.

If that happens, the tax office will inform you in a letter marked TC607. You will then have 30 days to contact HMRC and explain why you missed the deadline. If you don't, you will stop receiving the support and may also have to pay back all tax credit money received since 6 April this year.

In some cases, the tax office might give you an extension until 31 January to confirm your details, but that's decided on a case-by-case basis.

How much are tax credits worth?

Your payments are determined not only by your income and how many hours you work, but also by your personal circumstances – for instance, if you have children, are a single parent, or are disabled.

If you're eligible for the basic element of working tax credit, you can get up to £2,435. If you claim the family element and child element of child tax credit, you can get up to £4,000.

Tax credits are ending on 5 April 2025 and being replaced by Universal Credit. You can choose switch earlier if you wish. Otherwise, the Department for Work and Pensions (DWP) will send you a letter telling you when the switchover date will be.

If you are claiming for the first time, you'll only be able to use the new system.

Find out more: Universal Credit Migration Notice letter – what you need to know

Watch out for your P60 form too

The tax credit renewal notice isn't the only important document you can expect to receive this month. If you are employed, you should be given a P60 form by 31 May at the latest.

This form, generated automatically by HMRC and issued by your employer or pension provider, proves how much you've earned over the financial year – from 6 April to 5 April – and how much tax you've already paid on your salary. People with more than one job may receive more than one P60.

The document is very important as you'll often be asked to provide a copy when applying for a mortgage, property rental or other financial service. You'll also need it to claim back overpaid tax and to apply for tax credits.

While there is no obligation to do anything with it, you should cross reference your P60 form against your payslips to make sure everything matches up.

If you notice a discrepancy on your P60, you should inform HMRC.