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Tax credit and change in circumstances

Find out all the changes in your circumstances that you have to make HMRC aware of by law

In this article
What happens to my tax credit if my circumstances change? Tax credit changes: one month deadline Tax credit: other changes
How to tell HMRC about changes in circumstances Changes in circumstances: your questions answered

What happens to my tax credit if my circumstances change?

It's important to keep HMRC up to date with any changes to your income or your family circumstances, as this could have an impact on how much you get in tax credit. Failing to do so could result in you getting a fine. 

We've outlined what kinds of changes have to be reported to HMRC. If something happens that's not on the list, and you're not sure whether to report it or not, it's  best to give the Tax Credit Office a call to find out.

 

Tax credit changes: one month deadline

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

The start or end of a relationship

If you claimed as an individual but you are now married, in a civil partnership or living with someone as a couple, or if you claimed as a couple but you have separated or your partner has died, you need to report this.

Your job changes

You must inform HMRC within one month if you stop working, you are working at least 16 hours a week and your hours drop below this, or you are working 30 hours or more a week and your hours drop or reduce to nil.

For couples with children, it is your joint working hours that count towards the 30-hour total.

You must also let HMRC know if you've been on strike for more than 10 days, or if you lose your right to work or reside in the UK.

Childcare issues

If you are claiming child-care elements and your costs stop, or go down by £10 a week or more for at least four consecutive weeks, you must inform HMRC.

The same applies if 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.

You also need to inform HMRC if 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).

If someone dies

It can be the last thing you’ll want to think about, but if someone who affects your tax credit allowance dies – a partner or child, for instance – you'll need to tell HMRC, and many other government departments.

The government’s Tell Us Once bereavement service adds a notification of death across many different records, so you won’t have to notify each authority separately.

You leave the UK

If you leave the UK for more than eight weeks – or 12 weeks if you’re leaving for a health-related reason, or because someone in your family has died – you must tell the Tax Credit Office. This is particularly important if you plan to leave the UK for good.

Tax credit: 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
  • you have a new baby, or a new child comes to live with you (but bear in mind that the two child restriction on child tax credit may apply to children born after 6 April 2017)
  • 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 overpaid tax credit. See our guide to tax credit overpayments.
  • your childcare 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
  • you or someone you’re claiming for starts or stops getting a disability benefit.

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.

How to tell HMRC about changes in circumstances

Most changes of circumstances can be reported online. You can also see your claim information, your tax credit payments and you can renew your tax credit (the deadline for this is 31 July each year).

If you have been claiming as a single person, and want to add a partner – after you’ve moved in together, for example – you can notify HMRC online, but there will be extra work for you to do.

HMRC will cancel your single person claim, and then it is up to you to send in a joint person claim from scratch. This may mean there’s a delay while the new claim is processed, but it can be backdated by up to a month, so you shouldn’t be left out of pocket for long.

You can also call the tax credit helpline on 0345 300 3900, or write detailing the changes.

The address is:

Change of circumstances
HMRC: Tax Credit Office
BX9 1ER

Changes in circumstances: your questions answered

We've answered some of the most common questions about reporting any changes that might affect your tax credit.

 

What happens if I don’t tell HMRC about these changes?

 

If you are late reporting a change in circumstances, it could mean HMRC makes an overpayment, paying you more tax credit than you are entitled to. If this happens, you will have to repay them. This will either be done by reducing your future tax credit rewards, or making a direct payment.

What’s more, if you fail to report changes that are classified as those you must report within one month, you may be charged a £300 penalty.

If you fail to report a change, and confirm incorrect information when it comes to renewing your tax credit, you could receive a penalty of £3,000.

 

Will changes in circumstances be backdated?

 

If your change in circumstances means you’re eligible to be paid more in tax credit, this can only be backdated by one month in most cases.

If your changes mean you’ll be paid less, these will be backdated to whenever the change took place, and often mean you’ll have to pay back an overpayment you’ve received.

 

I get child tax credit and child benefit. Will both records be updated?

 

Not necessarily. If, for instance, you contact HMRC to let them know that a young person you claim child tax credit and child benefit for is either staying in or leaving approved full-time education or training, the notification should be updated on both sets of records, but this is not a given.

You should still contact both offices to make sure.

 

How long does it take to make adjustments?

 

Changes should be made within a month of HMRC receiving them. This allows for backdated payments of up to one month if the changes mean you can get paid more.

If there is a delay which means you receive overpayments, you can make an appeal when HMRC asks you to pay the money back.

 

What if I receive Universal Credit?

 

Universal Credit is the new government benefits model being gradually rolled out across the UK.

You may already receive Universal Credit, depending on where you live. If you are, you won't be able to apply for working tax credit or child tax credit, as Universal Credit payments should replace these.

Changes in circumstances can also affect your Universal Credit payments – contact HMRC to check if this applies to you.

 

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