Tax credits and change in circumstances

Tax credits & benefits

Tax credits and change in circumstances

By Joe Elvin

Article 7 of 10

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Tax credits and change in circumstances

This guide lists all the changes in your circumstances that you have to make HMRC aware of by law.

It's important to keep HMRC up to date with any changes to your income or your family circumstances, as this will have an impact.

NOTE: Tax Credits are due to be replaced by Universal Credit. Transitional arrangements will apply. Full details have yet to be announced.

Tax credits changes: one month deadline

By law, you must tell HMRC within one month of the following changes happening:

  • If you claimed as an individual but you are now married, in a civil partnership or living with someone as a couple
  • If you claimed as a couple but you have separated or your partner has died
  • If you are claiming child-care costs and your costs stop or go down by £10 a week or more (and the change lasts at least four consecutive weeks)
  • You no longer use a registered or approved provider
  • You or your partner leave the UK permanently
  • You go abroad for a temporary absence of more than eight weeks (or more than 12 weeks if you go abroad because you are ill or someone in your family is ill or has died)
  • You lose your right to reside in the UK
  • You stop working
  • You are working at least 16 hours a week and your hours drop below this
  • You are working 30 hours or more a week and your hours drop below 30 hours or reduce to nil. (For couples with children it is your joint working hours that count towards the 30-hour total).
  • You have been on strike for more than 10 days
  • A child or young person you are responsible for moves out to live with someone else or starts to claim Income Support, Incapacity Benefit, income-based Jobseeker’s Allowance, Employment and Support Allowance, child tax credit or working tax credit in their own right
  • A young person between 16 and 20 you are responsible for leaves full time education or approved training, starts advanced education (for example, a degree course), starts training provided under a contract of employment, or starts paid work (usually for more than 24 hours a week).

Tax credits: other changes

You don't have to tell HMRC about the following changes, but it might be in your interests to do so, as you may be entitled to a higher tax credit award:

  • A young person over 16 continues in full time education, registers with a careers service, Connexions or equivalent, or joins an approved government training scheme
  • Your income goes down
  • Your income goes up. This may not affect your current award, but it will affect how much you get next year. If you get paid too much because you delay telling HMRC about any changes, you will be asked to pay back any tax credits overpaid. See Tax credits overpayments
  • Your child-care costs go up by £10 a week or more (and the change lasts at least four consecutive weeks)
  • Your usual working hours change from less than 16 hours a week to more than 16 hours a week
  • Your usual working hours change from less than 30 hours a week to 30 or more. For couples with children, it is your joint working hours that count towards the 30 hours.

It's worth telling HMRC within three months of a change of circumstances which increases your award, as usually awards can only be backdated by up to three months.

  • Last updated: April 2016
  • Updated by: Joe Elvin