Tax Credit payments could be stopped if changes happen in family or work life

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Working Tax Credit and Child Tax Credit are a vital source of extra money for thousands of claimants across the UK.

However, the 'legacy' benefits are gradually being phased out and being replaced by Universal Credit.

Now only people currently receiving Tax Credits will continue to do so.

Meanwhile, new claimants will have to make a claim to the Department for Work and Pensions (DWP) for Universal Credit.

The amount of Tax Credit payment a person receives depends on a number of factors, as first reported by Daily Record. These include the number of hours they work, how much they are paid, their residential circumstances and whether or not they have a disability.

However, Tax Credits could go up, down or stop if there are changes in your family or work life.

Any changes to your circumstances must be reported to HMRC as soon as possible to make sure you receive the right amount of Tax Credit.

If you are overpaid, you will have to pay the money back and if your Tax Credits stop, you cannot claim them again.

You must tell HMRC straight away if:

  • Living circumstances change. This could mean you start or stop a relationship, move in with a new partner, get married or form a civil partnership, permanently separate or divorce
  • Child or partner dies (you do not need to tell HMRC if you’ve already used the Tell Us Once service)
  • Child stops going to childcare for four weeks or more when they would normally go
  • Childcare costs stop, reduce by £10 or more a week, or you start getting help with them
  • Child leaves home – e.g. moves out or goes into care
  • Child is taken into custody
  • Child over 16 leaves approved education or training, or a careers service
  • Childcare provider is no longer registered or approved
  • Working hours fall below 30 hours a week (combined if you’re in a couple with children)
  • Working hours fall below or go above the minimum required to qualify

You must also tell HMRC if you:

  • Go abroad for eight weeks or more
  • Leave the UK permanently or lose the right to reside in the UK
  • Start working for less than 16 hours while claiming childcare costs – except in certain situations
  • Have been on strike for more than 10 consecutive days

How do you pay back Tax Credits?

If you need to pay back Tax Credits, the Tax Credit Office will write to tell you how much money you owe and how to repay it.

Those who receive this letter and think a mistake has been made must call the helpline as soon as possible.

If you still get Tax Credits or are now receiving Universal Credit, the money you owe will usually be taken from your future payments.

Those who no longer get Tax Credits and don't get Universal Credit will have to pay HM Revenue and Customs (HMRC) directly.

The money may be recovered from you in another way if you don't repay HMRC in time.

HMRC repayments can be spread out over a longer period of time if people are facing financial problems.

It is also possible for you to dispute a request to pay back an overpayment if a claimant doesn’t agree with the decision.

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Advice on the Citizens Advice website reads: “If you have a Tax Credit overpayment you must pay back, you should deal with it as soon as possible.

“While having to pay back money can be worrying, there are lots of ways to pay HMRC – including in instalments.

“If you’re disputing paying back the overpayment, you might still need to start paying HMRC back. You’ll get this money back if your dispute is successful.”

For more information about Tax Credit overpayment, visit the GOV.UK website here.

  • Money

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