29 March 2020

31 March deadline for nil award claimants

In January and February 2020, HMRC wrote to certain tax credit claimants who had long term nil awards. The letter advises them that their claim will not be renewed from 6 April 2020 for the 2020/21 tax year unless they contact HMRC via the tax credits helpline (0345 300 3900) by 31 March 2020. Due to reduced opening hours, the helpline closes at 4pm on 31 March.

A nil award means there is entitlement to working tax credit and/or child tax credit but the level of income means that any entitlement is tapered to Nil. This exercise is in preparation for the migration to UC of tax credit claimants.

Some people with nil awards may welcome the move to take them out of the system so that they no longer receive correspondence and go through annual renewals with HMRC. However, one of the reasons to keep a nil award in place (often called a protective claim) is to help if there is an unexpected fall in income or change of circumstances that is likely to increase the award. This is especially important now that most people cannot make new claims for tax credits.

Given the current situation with coronavirus, it is possible that some nil award claimants may see a fall in income in 2020/21 compared to 2019/20. Claimants in this position should make sure they contact HMRC by 4pm on 31 March 2020 in order to keep their claim active, otherwise their claim will not be renewed and the majority of people will have to claim universal credit if they need financial support.