25 January 2022
Tax credit renewals using estimated income - provide actual income figures for 2020/21 tax year
Anyone who completed their tax credit renewal by 31 July 2021 using an estimate of their income for 2020/21 will have to tell HMRC their actual income figure for 2020/21 by 31 January 2022. This date is sometimes called the second ‘specified date’ or 2SD. You can read more about it in our renewals section.
If claimants miss the 2SD deadline, HMRC will automatically finalise their tax credit award using the estimated figure already provided. Normally, the claimant cannot subsequently ask for this to be changed later.
However, like last year, HMRC acknowledge that the impacts of the coronavirus pandemic mean that some people may not be able to give their actual income figure by the 31 January 2022 deadline. Because of this HMRC are, again, adopting the process they brought in last year so they can accept late declarations of actual income for tax credits – after the usual 31 January deadline - in certain situations.
Claimants (or their agents) who miss the 31 January 2022 deadline to provide their 2020/21 actual income (after giving an estimate by 31 July 2021) for tax credits should still make every effort to confirm their figures as soon as they can. Once they have the actual figure, they need to ring HMRC’s tax credits helpline and explain why they missed the deadline. HMRC say that if the reason is COVID related, they will use their tax credit enquiry powers to accept the late actual income figure and issue an updated final award.
If the reason for missing the deadline to provide actual income is not related to COVID and HMRC refuse to accept the late figure, the claimant may need to rely on appeal rights if they want to challenge the award decision, in the normal way.