People who received Working Tax Credit didn’t have to tell HMRC about any changes to their circumstances that were caused by the pandemic.
But this is changing back to the original rules at the end of November. Make sure you don’t get caught out.
What did HMRC change about Working Tax Credit as part of their COVID-19 response?
As part of their plans to help people deal with the financial impact of COVID-19, HMRC said that Working Tax Credit claimants didn’t need to tell them about any short term changes to their employment situation. For example, if they were put on furlough by their employer or had their hours reduced.
This gave people a level of certainty during a tumultuous time. Even if people’s working hours were reduced, they received Working Tax Credit as if they were at their usual level.
What do I have to do by the end of November?
You now have a deadline of 25th November. If your working hours aren’t going back to normal by then, you must tell HMRC about the change.
HMRC’s Director General for Customer Services, Myrtle Lloyd, said: “We introduced this measure last year to help support working families. It is vital that Working Tax Credit claimants who have benefitted from it update HMRC with their working hours if they have reduced, and they won’t return to their normal level before 25 November.
“Anyone who is no longer eligible for Working Tax Credit due to a change in their circumstances may be able to apply for other UK Government support, including Universal Credit.”
What happens if I don’t tell HMRC?
If your employment situation returns to its pre-pandemic normal before 25th November, you don’t need to do anything.
But after this date, you have one month to tell HMRC about any permanent changes to your working situation. If you don’t, there’s an initial £300 fine and then a cumulative £60 per day penalty on top. So this means getting in touch with HMRC before 25th December.
Permanent changes means things like a long-term change to your working hours, losing your job, getting a new job, or being made redundant. HMRC set this month deadline so that the system is fair. If you’re entitled to Working Tax Credit, you receive the full amount. And, if your circumstances change from this and you’re working more, the support changes accordingly.
If you claim Working Tax Credit when you’re not eligible, you’ll have to repay this money to HMRC. And if you provide incorrect information, you can be fined a maximum of £3,000 on top of any other penalties.
How do I tell HMRC about changes to my circumstance?
HMRC has a dedicated Working Tax Credit phoneline, 0345 300 3900 so you can ask any questions here.
You can report changes online to HMRC here.
To use this service, you need a permanent National Insurance Number and a Government Gateway ID. If you need to set this up first, you’ll need to allow time to get the two part security authentication information. These come in the post and you can’t access anything without them.
As a first time user, you’ll need to prove your identity using any two of these documents:
- UK passport
- P60
- Tax credit claim details
- Credit file information (mortgage, loans, credit cards)
- Self assessment tax return details
- One of your three most recent payslips
- Northern Ireland driving licence
This isn’t a new complicated rule to worry about. It’s another part of HMRC’s reset to pre-pandemic rules. It’s important to be aware that Working Tax Credit reporting arrangements are different and to familiarise yourself with the changes you need to tell HMRC about. That way you’ll always get the financial support you’re entitled to and avoid any potential penalties for misleading HMRC.
