Help with your Tax Credits renewal

Every year many people across the UK get a tax credits renewal pack. If you do get one you need to check your renewal forms and make sure you pass on the correct information to the Tax Credits Dept.

This article can help you find out some of the information you need to check, how to work out your personal income(s), and how to avoid common mistakes.

Check the information presented

Renewal packs usually include the an Annual Review notice (TC603R) plus an Annual Declaration form (TC603D or TC603D2). And everyone needs to renew by 31 July or whatever date is shown on letters from HMRC. A tax year runs from 6 April one year to 5 April the next.

The important information that you need to check on your Annual Review notice is:

• your personal circumstances shown are correct and as expected
• all the changes you have reported during the last tax year are included as sometimes there can be mistake
  

If there is anything incorrect you must tell HMRC straight away. Especially if anything is wrong on your notice or if anything has changed and they have the wrong information.

If previously you have claimed tax credits as a single person - or as a couple your notice should say this, a couple is known as a 'joint' claim.

You should be making a 'joint' claim if you are:

• married
• in a civil partnership
• living together like you're married or in a civil partnership

Your form should also show the country you live in most of the time. It doesn't matter if you sometimes go to other countries for holidays for up to 8 weeks (and in some cases up to 12 weeks) as this is usually still allowed. And you may also be able to get tax credits if you live outside of the UK for a valid reason. But you will need to confirm these extra conditions with HMRC before applying for them.

Your work or benefits should also be reported, showing the country you work in most of the time with the number of hours a week you usually work. It can also show you if you got any benefits, for example Income Support or Employment and Support Allowance.

If you have any disabilities your notice will explain if you were paid the disability part of Working Tax Credit. This also applies to severe disabilities and their allowances receivable.

If you have a child or children then your notice should show the correct information about them. You can usually get Child Tax Credit for a child up to 20 years old, with the conditon that they are in full-time education or an approved training course.

And if you work are working at least 16 hrs per normal week and have to pay for a registered or approved child minder or carer, you may be able to get an extra Working Tax Credit payments to help with these costs too.

How to work out your total income for your Annual Declaration

It is worth noting that some social security benefits are taxable, such as contribution-based JSA (Job Seeker's Allowance), and as such they will count as income when you make a tax credits claim. Other types such as Disability Living Allowance, don't count as income. So be careful to be sure if your benefit is taxable. If your not sure ask rather than guessing and getting the claim incorrect.

If you're in employment, you should have a P60 from your employer at the end of the tax year (5th April), which will show your earnings and tax paid for the whole tax period (6th April to 5th April). You need to include income from all types of jobs you have had in the tax year so it may need several P60's for filling it in.

If you cannot find your P60, then don't worry as most payslips usually show a running total of all earnings and tax paid for the year. If you still cannot get the full information you can provide an estimate but make sure to give the actual income figure no later than 31 January or again it can mean having to pay tax credits back at a later date if you've claimed to much.

You must also remember to add in:

• all taxable 'benefits in kind' you may have received, eg car mileage allowance payments for using your own car, or a company car, usually on a P11D or P9D forms from your employer
  
• all other payments you received, for example tips or strike pay, bonuses etc

If you're self-employed your income will be the net profit you made in the tax year. If you haven't had a profit or loss drawn up prior to sending in your tax return, then you will need to give an estimate of your profit and again you must provide an actual by the 31st January or you may have received too much or less in Tax Credits.

If you made a Net Loss on self employment, just give a figure of zero. But please do note if you had any other income during the year, you can take the loss off this income.

Be careful to get the best advice and support

Bear in mind that other income like pensions, shares, income from property (sale or rental), income that you receive from abroad and savings need to be also declared. If in doubt the best thing to do is ask a professional as the self employment and other incomes can become a bit tricky and you could end up claiming less or more than your due.

Tax Affinity Accountants are experts is tax and accountancy. Based in Kingston upon Thames they cover the whole of the UK and help make sure clients get the correct amount of tax credits for their situations. Visit www.taxaffinity.com for more information or if you feel you need help in filling in the forms. Follow Tax Affinity on twitter at @tax_affinity to find other useful tips and advice.