News: 21st February 2013

HMRC urges tax credit claimants to keep information accurate

HMRC urges tax credit claimants to keep information accurateHM Revenue and Customs (HMRC) is warning tax credit claimants that they must let them know of any changes to their circumstances - or face financial penalties.

The department issued a plea this morning (February 21st) to those who could be affected, reiterating the importance of updating information as soon as it happens.

This, HMRC said, includes changes to working hours, living arrangements, income or childcare costs, adding that claimants must do it for the whole tax year if they haven't already done so.

Failure to update information could lead to people receiving more money than they are entitled to, which would need to be paid back at a later date. Other financial penalties could also apply.

It also comes as changes are brought in to the income increase disregard. Any household income of more than £5,000 for the tax year will result in a reduction in tax credits awarded for the 2013-14 tax year - a figure that used to be £10,000, but was halved after the 2010 Budget announcement.

HMRC's Director General of Benefits and Credits, Nick Lodge, explained that it is easy for people to forget their obligations on keeping information up to date.

"Many people forget or fail to tell us about important changes - such as having a partner move in or an increase in income - which will affect the amount of money they receive. This could mean that they don't get all the money they are entitled to. Or they could receive money that they have to pay back," he noted.

"We therefore urge them to report changes promptly, and make sure all details are accurate."

HMRC added that even if a household's income increased by less than £5,000 in a tax year, it is essential that the department is told as soon as possible. Failure to do so will mean next year's figures are likely to be incorrect, therefore leading to an overpayment and later financial penalties.

Posted by Thomas Fletcher


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