EFFECT ON PAYMENTS: As a rule, once you start getting tax credits it is going to reduce other benefit payments, such as:
- Employment and Support Allowance (income-related)
- Housing Benefit
- Income Support
- Jobseeker’s Allowance (income-based)
- Pension Credit
You cannot claim Tax-Free Childcare or Universal Credit and get tax credits at the same time.
Note: The office that sends the benefit payments can help you work out exactly how tax credits affect benefits.
Extra Help available with Tax Credits
You may qualify for extra support and other welfare benefits if you already get tax credits. Check to see if you can get help with:
- Medical prescriptions and several other health-related costs.
- Food, milk tokens, and vitamins for women who are pregnant (or have a child under 4).
- Maternity costs such as the £500 payment called the Sure Start Maternity Grant.
- School costs for your child including school meals, transport, uniforms, and trips.
- The cost of organising a funeral.
- Traveling to visit someone in prison, paying for court fees and legal costs.
- Heating bills and household energy costs.
- Certain types of home repairs carried out by your local council or authority.
Often, you will need to prove that you are receiving tax credits to get the extra financial help. You can use the Tax Credits award notice as proof.
Other Benefits that affect Tax Credits
As a rule, your income will determine whether you can get tax credits and what amount you will qualify for. But, several welfare benefits also count towards your income. This can include certain kinds of foreign benefits.
Extra tax credits are available for many families if you or your child get certain disability benefits.
If you get tax credits they are going to stop altogether if you start getting Universal Credit.
Note: The benefits calculator is the government’s online adviser for finding out what benefits you could get.
Tax Credits Checks 2022
This section explains the procedure for tax credits checks. Find out what you need to send and what happens to a claim. You can also find out the deadline for responding to the Tax Credit Office.
You would receive a letter from the Tax Credit Office if they want to check your tax credits. You must reply with the information they have asked for by their response deadline.
In most cases, tax credits checks get carried out to ensure you get the right amount of benefit.
- The letter you receive explains the reason for the tax credits checks and how you must respond.
- The letter will show the deadline for your reply. Be sure you send the information back to them before the deadline expires. You can now reply to a HMRC tax credits check (TC122) online as well as using the reply form.
- You will get another letter from the Tax Credit Office clarifying the results of the HMRC tax credit check.
The check can request information about your personal circumstances. This includes your employment details and your income. They can also ask your employer or childcare provider for extra information.
As a rule you will get back any original documents you send to them. The exception could be if they believe the documents are not genuine or not do not belong to you.
Results of a Tax Credits Check
Several different things can happen following the results of a tax credits check. In most cases, your tax credits will either be:
- Increased: If they determine you are not receiving enough tax credits.
- Reduced: If they determine your tax credits are too high.
- Stopped: If they determine that you should not be getting any tax credit payment at all.
Note: You will have to repay tax credits overpayments if you should not have claimed for them.
Tax Credits Penalties
In some cases, you may also receive a fixed-rate penalty if you:
- Fail to send the information they ask you for.
- Acted ‘carelessly’ or ‘dishonestly’ during your claim or during the renewal.
Note: Contact the Tax Credit Office if you have difficulty sending what they ask for. Your payments may stop if not.