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Tax Credits: changes of circumstances

Last updated: 15 Dec 2021

Changes in your circumstances to do with your work, income, other benefits, children, childcare and partner must be reported to HMRC, or you could be overpaid and even have to pay a penalty. Most changes have to be reported within one month. You should report any changes as soon as possible and not wait until your Tax Credits are renewed each year. Some changes may increase/decrease your Tax Credits, but other changes could end your claim and you may be able to claim Universal Credit instead. 

For more information on what kind of changes can trigger a move to Universal Credit please see this table on the Entitled To website.

There is more information about changes you must report to HMRC on gov.uk. The Low Incomes Tax Reform Group also has useful information to help you understand how changes affect your Tax Credits.

Reporting changes of circumstances

How do I report a change of circumstances?

You can report most changes of circumstances online on gov.uk. If you cannot report the changes online you can ring the Tax Credits helpline 0345 300 3900, or write to the Tax Credits Office.

Every time you contact HMRC about your Tax Credits, 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.

Changes to your work

If your normal working hours decrease

If your normal working hours fall below the minimum required for Working Tax Credit you must report it within one month. Your entitlement to Working Tax Credit will end but you will get a four week run-on. If you are getting Child Tax Credit this will continue but you may want to consider if you will be better off claiming Universal Credit instead.

If you start working enough hours again you can add Working Tax Credit back on to your claim, but only if you have continued to receive Child Tax Credit. So, if you think the reduction in your hours will only be for a short period, you may wish to continue claiming Tax Credits rather than claiming Universal Credit. You should use a benefits calculator or try to get further advice, as sometimes you may be better off on Universal Credit in the short term, but worse off in the long term if you could get Working Tax credit again within a short space of time.

If you claim Universal Credit your Tax Credits will stop immediately and you will not be able to make a new claim in future, even if you are worse off, or not entitled to Universal Credit at all.

If your normal working hours drop below 30 a week

If your normal working hours fall below 30 a week (or if you are part of a couple your combined hours fall below 30) you must report it within one month as you will stop being entitled to the 30 hour element, after a four week run-on.

If the minimum hours you are required to work are 30 a week, you will lose your entitlement to Working Tax Credit, after a four week run-on. If you are getting Child Tax Credit this will continue but you may want to consider if you will be better off claiming Universal Credit instead. You can use a benefits calculator to work out how much Universal credit you might be entitled to.

If your hours are likely to increase to 30 again soon, you should try to get further advice as you may be better off on Universal Credit in the short term, but worse off in the long term. If you claim Universal Credit your Tax Credits will stop immediately and you will not be able to make a new claim in future, even if you are worse off, or not entitled to Universal Credit at all.

If your normal working hours increase

If your normal working hours increase you must report the change but you don’t have to do it within one month. However, it is best to report the change as soon as possible as HMRC may be able to amend your current Tax Credit award straight away to avoid being overpaid Tax Credits.

Tax Credits usually 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. So, even if you report a change you might not see an increase/decrease in your Tax Credits until your tax credit claim is finalised at the end of the tax year.

Your Tax Credits may decrease due to your increase in income, including any help you get with childcare costs. You lose the main elements of Working Tax Credit first, followed by the childcare element of Working Tax Credit and then Child Tax Credit. For more information see our page on how your Tax Credits are worked out.

If your Tax Credits decrease you might want to check if you would be better off claiming Universal Credit instead. You can use a benefits calculator to work out how much Universal Credit you might be entitled to. If you are considering switching to Universal Credit you should try to get further advice as Universal Credit has different conditions to Tax Credits. If you claim Universal Credit your Tax Credits will stop immediately and you will not be able to make a new claim in future, even if you are worse off, or not entitled to Universal Credit at all.

When you can still be treated as working your normal hours

There are several circumstances when you will be treated as being “in work” even though you are not actually working. Although you may be absent from work, you will be treated as being in work if you were working immediately beforehand and you are:

In all these cases, you will be treated as working the same number of hours as you were immediately before you stopped work or reduced your hours. It’s important to tell HMRC if you get any statutory payments or Maternity Allowance in relation to time off work as a parent. That is because not all of this money will be taken into account for Tax Credits.

Changes to your income

If your income increases/decreases

You don’t always have to report changes to your income straight away, but it is a good idea to report most changes if you are not sure. This can avoid being overpaid or underpaid Tax Credits. If you report these changes after more than one month, any increase in your payments can normally only be backdated by one month.

Tax Credits usually 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. So, even if you report a change you might not see an increase/decrease in your Tax Credits until your tax credit claim is finalised at the end of the tax year.

Changes to your other benefits

If you start or stop claiming other benefits or your other benefits change

If you start or stop claiming other benefits or your other benefits change you don’t always have to report the change straight away, but it is a good idea to report it as soon as possible if you are not sure.

Taxable benefits (regardless of whether you actually pay tax on them), such as Carer’s Allowance and New-Style Employment and Support Allowance are counted as social security income for Tax Credits so these benefits can affect the amount of Tax Credits you are entitled to.

Other benefits, such as Disability Living Allowance for your child, or Personal Independence Payment for yourself or your partner, can increase your entitlement to Tax Credits. If you report these changes after more than one month, any increase in your payments can normally only be backdated by one month.

Changes to do with your children

If a child stops living with you

If a child stops living with you, you must report the change within one month. You will stop being entitled to Child Tax Credit for that child from the date they moved out but will continue to get it for any other children you are responsible for.

If you are not responsible for any other children, the minimum hours you are required to work for Working Tax Credit may change and this might mean that you are not working enough to continue to qualify. If you stop qualifying for Tax Credits for this reason you will not get a four week run-on of Working Tax Credit so your Tax Credits will end from the date your child moves out. If this happens you might be able to claim Universal Credit instead. There are no minimum hours you need to work to get Universal Credit, but you may be required to look for additional work if you are not working full-time, depending on your circumstances.

If you don’t report that your child has moved out within one month you could be paid too much Tax Credit that you will have to pay back and you may also have to pay a penalty.

If a child over 16 leaves education

If a child over 16 leaves education you must report the change within one month. If you don’t report the change in time you could be paid too much Tax Credit that you will have to pay back and you may also have to pay a penalty.

If your child’s course has ended you will stop being entitled to Child Tax Credit from the date their course ends. However, if they are going on to further education (e.g. university), your Child Tax Credit can continue until 31 August after their course has ended, or they reach age 20, whichever is soonest.

If your child is under 18 and they voluntarily choose to leave education before their course ends your Child Tax Credit will normally stop straight away. However, if your child registers for work or training with your local careers service, local authority support service or have applied to join the armed forces, your Child Tax Credit can continue for a further 20 weeks. To get the 20 week extension you must inform HMRC that your child has registered for work or training with one of these providers with three months. You must also tell them if your child leaves the programme before the end of 20 weeks.

If your child is aged 18 or 19 and they voluntarily choose to leave education before their course ends your Child Tax Credit will stop straight away and you will not be entitled to a 20 week extension, even if they register for work or training with an approved provider.

For more information on Child Tax Credit for a child aged 16 or over please visit the Low Incomes Tax Reform Group.

If you are not responsible for any other children, the minimum hours you are required to work for Working Tax Credit may change and this might mean that you are not working enough to continue to qualify. If you stop qualifying for Tax Credits for this reason you will not get a four week run-on of Working Tax Credit so your Tax Credits will end from the date your Child Tax Credit ends. If this happens you might be able to claim Universal Credit instead. There are no minimum hours you need to work to get Universal Credit, but you may be required to look for additional work if you are not working full-time, depending on your circumstances.

If you have a baby or another child comes to live with you

If you have a baby or another child comes to live with you should report the change but you don’t have to do it within one month. However, it is best to report the change as soon as possible as you may be entitled to more Tax Credits. If you report the change after more than one month, any increase in your payments can normally only be backdated by one month.

If you already have children you won’t normally get any Child Tax Credit for a third or subsequent child born on or after 6 April 2017. You will still be able to claim any disability element for a third or subsequent child. You can also get the childcare element of Working Tax Credit for any number of children, but the maximum amount of help doesn’t change if you have two children in childcare or more than two. You can find more information on our page about Tax Credits if you have more than two children.

Changes with your childcare

If you start using childcare

If you start using childcare you should report the change but you don’t have to do it within one month. However, it is best to report the change as soon as possible as you may be entitled to the childcare element of Working Tax Credit. If you report the change after more than one month, any increase in your payments can normally only be backdated by one month.

If your child stops going to childcare

If your child stops going to childcare for four consecutive weeks or more you must report the change within one month. Your childcare element will stop after the four weeks, unless the childcare costs were awarded for a fixed period, in which case the childcare element will end from the week following the end of fixed period. If you don’t report the change in time you could be paid too much Tax Credit that you will have to pay back and you may also have to pay a penalty.

If you change childcare provider

If you change childcare provider you should report the change but you don’t have to do it within one month. However, it is best to report the change as soon as possible to make sure you are paid the correct amount of Tax Credits. If changing your childcare provider increases your childcare costs you may be entitled to more help through the childcare element of Working Tax Credit. If you report the change after more than one month, any increase in your payments can normally only be backdated by one month.

If changing childcare provider decreases your childcare costs by £10 a week or more you must report this with one month. Please see below.

If the amount you pay for childcare changes

If your childcare costs decrease by £10 or more a week you must report the change within one month. If you don’t report the change in time you could be paid too much Tax Credit that you will have to pay back and you may also have to pay a penalty.

If your childcare costs decrease by less than £10 a week, or if they increase you should report the change but you don’t have to do it within one month. However, it is best to report the change as soon as possible to make sure you are paid the correct amount of Tax Credits. If your childcare costs have decreased and you don’t report the change straight away you could be paid too much of the childcare element of Working Tax Credit and will have to pay it back. If your childcare costs have increased you may be entitled to more help through the childcare element of Working Tax Credit. If you report the change after more than one month, any increase in your payments can normally only be backdated by one month.

Changes to do with your partner

If you start living with a new partner

If you start living with a new partner you must report the change within one month. If you don’t report the change in time you could be paid too much Tax Credit that you will have to pay back and you may also have to pay a penalty.

Unfortunately, you cannot add a new partner to your existing Tax Credits claim. When you report that you are living with a new partner your single claim for Tax Credits will end – it is not converted to a couple claim. You will need to check if you can claim Universal Credit as a couple instead.

If you separate from or stop living with a partner

If you separate from, or stop living with a partner you must report the change within one month. If you don’t report the change in time you could be paid too much Tax Credit that you will have to pay back and you may also have to pay a penalty.

Unfortunately, your couple claim for Tax Credits cannot be converted to a single claim. When you report that you have separated from or are no longer living with a partner your couple claim for Tax Credits will end. You will need to check if you can claim Universal Credit as a single person instead.


This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.

If you have further questions and would like to contact our advice team please use our advice contact form below or call us.

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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.

We cannot provide advice on employment rights in Northern Ireland as the law is different. You can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.