Tax credits: changes of circumstances

Last updated: 29 Jun 2021

Coronavirus and changes of circumstances

If you are are a key worker (also known as a critical worker), and your job is in the list of key or critical workers for the country you’re living in (eg England), then you have three months, not one, to report changes to HMRC. That difference in the rules will last from 23rd May 2020 until the 30th September 2021. However, this doesn’t change the deadline to get back to HMRC if you are responding to your annual review or declaration.

Changes in circumstances for tax credits

There are some changes in your circumstances which you must report, or you could be overpaid and even have to pay a penalty. For example, if a child is no longer living with you or leaves school when they are over 16, you must report it as you would be overpaid Child Tax Credit. It is important to report changes like this as soon as possible, and within one month, to avoid problems. Another change which you must report is if you split up with a partner or start living with someone as a partner – in this case you will also need to make a new claim.

There are other changes which could increase the amount of tax credits you get. For example, if you have a new baby, you could get more Child Tax Credit. You should report these changes within one month to make sure you get as much extra money as possible (going back to the date of the change). If you report these changes after more than one month, any increase in your payments can normally only be backdated by one month.

Finally there are changes in income. You don’t always have to tell the Revenue about these, but it is a good idea to report most changes if you are not sure. You need to report your new income for the tax year, for example, 2021/22 includes all your income from 6 April 2021 to 5th April 2022 inclusive. If your income has just changed you will need to work out how much you were already paid before the change and since 6 April, and how much you will be paid from the change until the next 5th April.

Tax credits only respond to changes in income if your income is more than £2,500 higher or £2,500 lower than it was in the previous tax year.

There is more information on the GOV.UK website about which changes you must report. The Low Incomes Tax Reform Group has useful information to help you understand how changes affect your tax credits.

Every time you contact the Revenue, it is a good idea to make a note of the date and time of your call, or your online report of the change, and what you told them, in case there are any problems later.

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The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.