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Tax Questions: Renewing your Tax Credits (2022-23)

Tax Credits - Time to Renew

HMRC is currently issuing around 2.1m tax credit renewal packs which help calculate tax credits to help working families with targeted financial support.

If you received tax credits in 20211-22 you should receive a renewal pack from HMRC by end of May. You then have until 31 July to check the information and tell HMRC of any changes that may affect your claim, e.g., childcare costs, working hours or amount of income. 

This year there are two types of renewal pack, each requiring a different response.

The first version requires a response from you. With a red line across the first page it says, reply now. You must confirm the information and provide additional or amended information by 31 July or your payments stop. HMRC predicts around 630,000 customers will need to confirm this way in 2022 to renew their tax credits for 2022-23. There is an app you can use to update your details or you can submit online or use phone or post.

The second version may not require any action. With a black line across the first page it says, check now. You must review the information shown on the document. If it’s correct you don’t need to do anything, and your tax credits claim will be renewed automatically. Otherwise, you need to notify HMRC of any changes by 31 July or the payments you receive may be incorrect.

New guidance on pension income

On 6 May, HMRC amended guidance regarding what pension income you need to report when you claim/renew tax credits. You should exclude tax-free lump sum payments you received from a registered (approved) pension fund. Examples of these are: a pension commencement lump sum (tax-free cash); and the tax-free element of a pension drawdown payment, (uncrystallised fund pension lump sum). If you received money from a pension scheme and aren’t sure if it included a tax-free element, your pensions advisor or company can tell you.

Universal Credits will replace tax credits by the end of 2024.

See Universal Credit replacing tax credits.

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