How to Report Changes

First of all, it keeps their records current and you avoid receiving a benefit overpayment. This happens most often if you fail to report an increase in your income soon enough.

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Changes You Must Report Straight Away

You would need to notify HM Revenue and Customs (HMRC) ‘without delay’ about certain changes that affect tax credits, such as if your.

• Child stops living with you and leaves home (moves out or is taken into care).
• Child leaves approved education or training or careers service after they reach sixteen (16) years old.
• Child is taken into custody.
• Child or your partner dies (unless you already used the Tell Us Once service).
• Costs for childcare drop by £10 or more a week, stop altogether (fall to zero), or you start getting financial help with them.
• Childcare provider is not registered or approved any longer.
• Living circumstances change (examples include):
  • You start or end a relationship.
  • You form a civil partnership or get married.
  • You move in to live with a new partner.
  • Permanently separate or you are getting a divorce.
• Working hours drop below (or rise above) the minimum required to qualify for Working Tax Credit.
• Working hours drop below thirty (30) hours per week (combined amount for couples with children).

Note: You should make a new claim for tax credits if you start or end a relationship (or your partner dies).

You must also inform the Tax Credits Office (HMRC) straight away if you:

• Go abroad (leave the United Kingdom) for eight (8) weeks or longer (12 weeks due to an illness or bereavement overseas).
• Are ill or in hospital for more than 28 weeks (as an adult).
• Receive a prison sentence.
• Go overseas permanently or lose your right to stay (reside) in the United Kingdom.
• Start working for less than sixteen (16) hours while claiming childcare costs (some exceptions apply).

What if the Hours You Work Fall Due to COVID-19?

If a fall in your normal working hours is because of coronavirus (COVID-19), there is no need to report the change (e.g. you are on furlough).

HM Revenue and Customs (HMRC) will treat this situation as though you are working your usual hours until the Coronavirus Job Retention Scheme (CJRS) ends.

But, you would need to tell HMRC if you:

• Get made redundant.
• Lose your job.
• Stop trading as a self-employed person.

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Deadline for Reporting Changes

You would need to report most of the changes that affect your tax credits within one (1) month of when they happened. Doing so means you will reduce the amount you get overpaid.

Changing Estimated Income

You may have estimated your income at the time you renewed your tax credits (e.g. as a self-employed worker). If so, you should inform your actual income to HM Revenue and Customs (HMRC) by the 31st of January deadline.

Note: Failing to report a change within the one month deadline can result in a fine up to £300. Moreover, the penalty can increase to £3,000 for ‘intentionally’ giving false information.

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List of Other Changes You Should Report

Not all tax credit change of circumstances have a one month deadline for reporting. But, failing to notify HMRC about some circumstantial changes could result in an overpayment and affect other benefits, such as if:

• Your income changes (report it without delay if it increases or decreases by at least £2,500).
• Your working hours increase to thirty (30) hours or more per week (combined for a couple with children).
• You have a baby or you become responsible for someone else’s child.
• You start receiving, or you stop getting, benefits (or your entitlement to benefits changes).
• You, or a member of your family, start or you stop getting a disability benefit (e.g. Disability Living Allowance or Personal Independence Payments).
• You receive a certification that your child is blind (or they are no longer certified as blind).
• You change your childcare provider or you start paying for registered or approved childcare.
• You stop receiving financial help with the costs of childcare.

As a rule, tax credit payments cannot be backdated for more than one month. So, you should report these kinds of changes as soon as they happen (not the end of the year) to avoid losing money you are entitled to.

Critical Workers and Reporting Changes

HMRC will backdate any increase in tax credits for a period of up to three (3) months for critical workers who report a change in circumstances.

But, once the Coronavirus Job Retention Scheme (CJRS) closes, the process of backdating returns to one (1) month.

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How to Report a Changes in Circumstance

The easiest way to report a tax credits change is online via the GOV.UK website. But, the online service does not allow you to report all types of changes, such as:

• The bank account that you want to use.
• Most changes that have not yet happened (excludes a change to existing childcare costs which is up to one week in advance).
• The frequency of your payments.

You will need to provide some basic information the first time you sign in to the online service, such as:

• Government Gateway user ID and strong password (you can create an ID when you use the service).
• Your permanent National Insurance number (NIno).

There are several ways to prove your identity using one of the following documents. You can use your:

• Bank account details
• P60
• Recent payslips
• Passport number and expiry date

Signing in activates your personal tax account so you will be able to use this service to check and manage your HMRC records as well.

Tax Credits Overpayment Advice

You can also manage tax credits online to report changes to your circumstances. You should include the old details with the new details (e.g. PAYE reference numbers, employment change dates, and the names of employers).

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Why Do Your Tax Credits Change?

There are several reasons why your tax credits change. So for example, your payments may increase (go up) if:

• Your benefits go down or they stop altogether.
• You start receiving the PIP benefit, Disability Living Allowance, or other disability benefits for yourself or for a child you are responsible for.
• You have a child.
• Your childcare costs increase (go up).
• Your income drops by more than £2,500.

But, your payments may decrease (go down) or stop altogether, if:

• Your income increases by more than £2,500 (report it without delay to avoid overpayments).
• You did not renew your tax credits claim.
• Your award notice shows a tax credit overpayment.
• You stop receiving the PIP benefit, Disability Living Allowance, or other disability benefits for yourself or for a child you are responsible for.
• You or your partner qualify for and start claiming Universal Credit.
• Your childcare costs increase (go up).
• Your child is age 16 to 19 years old and you did not inform the Tax Office that they are in approved education or training.

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