Tax Credits: Changes that must be reported to HMRC

Certain changes of circumstances must be notified to HMRC within a specified time period. This section explains the changes that must be reported and when. It may be desirable to report other changes, although not mandatory. These are explained in the other changes part of this section.

Changes that must be reported

The changes that must be reported to HMRC are set out in Regulation 21 of SI.No.2014/2002.

HMRC have set out their interpretation of Regulation 21 in their tax credit technical manual and also on gov.uk.

They are also reproduced on the TC602SN checklist that is sent out with tax credit award notices.

From 6 April 2012, the Tax Credits (Miscellaneous Amendments) Regulations 2012 added a further change that must be reported to HMRC. This was introduced to reflect the change to the working hours requirement for certain couples with children. Where one or both members of a couple who are subject to the 24 hour rule reduce their hours or cease to work so that they no longer meet the condition that between them they work 24 hours with at least one person working at least 16 hours a week, there is a change of circumstances that must be reported.

Claimants reporting a change in their household from joint to single and vice versa and who consequently need to end their claim and submit a fresh one in their new capacity, should take note that rollout of Universal Credit full service may prevent a fresh tax credits claim in their postcode area and they may need to claim Universal Credit in place of a new tax credit claim.

Also, where a change in household from a Joint claim to single claim is required, it may be beneficial to call the tax credit helpline on 0345 300 3900 rather than report the change online as the helpline can set-up the new single claim over the phone. If the change is reported online, claimants will need to then phone the helpline to request a paper claim form or request a form via the online form.

Time limit for reporting changes

Changes that must be reported to HMRC must be reported within one month from the date the change happened, or if later, the date the claimant became aware of the change. The only exception to this is where a young person ceases to be a ‘qualifying young person’ for tax credit purposes. In that instance it must be reported within one month from the date the change happened.

Prior to 06 April 2007 the length of time allowed for claimants to report those obligatory changes of circumstances was three months. The change highlighted the many difficulties inherent in imposing a time limit for notifying such changes, for example household changes when it is sometimes not clear whether or precisely when a partner has left permanently.

If a claimant does not find out about the change in circumstances until after it has happened, the one-month time limit starts from the point at which they first become aware of it (with the exception for a young person ceasing to be a qualifying young person). Any overpayment is calculated from the actual date of change as the one month limit is relevant only from a penalty point of view. This is not often communicated adequately to claimants who often believe they have one month to inform HMRC without any overpayment accruing.

Bereavement

When a tax credit claimant dies, or a child or qualifying young person who is included in a tax credit claim dies, this is a change of circumstances which must be notified to HMRC within 30 days.

Where a child or qualifying young person included in a claim dies, any child tax credit for them continues for 8 weeks from the date of death or, until the young person would have reached age 20 if that date is sooner.Where a claimant dies who was part of a joint claim, the joint claim will end and the surviving partner will need to re-claim to continue to receive tax credits. However, in some areas where UC full (digital) service is available, most people cannot make a fresh tax credit claim and will need to claim UC instead. You can read more in our UC section.

For more information, please see our Bereavement section.

Updated 6 September 2017
Last reviewed 6 September 2017