Tax Credits: Backdating
In certain circumstances tax credits claims can be backdated. This section of the website provides information about when claims can be backdated as well as links to HMRC guidance about the backdating process.
Now that Universal Credit (UC) is available across the UK, HMRC state that most people can no longer make a brand new claim for tax credits. This page explain what this means for cases where backdating may be possible. For more information, see our who can claim section.
- Standard backdating
- Backdating more than 31 days/1 month
- Restrictions on backdating
- More information about backdating
An initial claim can be backdated if the circumstances entitling the person to tax credits have subsisted for the period of the backdating, in other words providing the person claiming was entitled to tax credits at the earlier date and remained throughout the backdating period. A claim can generally only be backdated by a maximum of 31 days. Prior to 6 April 2012, the backdating period was 93 days.
Changes of circumstances which increase an award can be backdated up to 1 month as a standard rule. Prior to 6 April 2012, the standard backdating period for changes of circumstances was 3 months. Changes of circumstances which reduce an award are generally backdated to the date the change took place or the beginning of the tax year, whichever is the earlier (but if the change took place in a previous tax year the case may be subject to enquiry which would allow HMRC to change the previous year decision. HMRC also have other powers to go further back on certain claims). Changes of circumstances involving the addition of any of the tax credit disability elements can be subject to longer backdating rules.
As one of the measures in respect of the coronavirus pandemic, temporary rules allowed changes of circumstances to be backdated up to 3 months for critical workers until 30 September 2021. See our tax credits and coronavirus section for more information.
There are two situations in which it is possible to backdate a claim more than 31days/1 month:
If a person has claimed asylum as a refugee and is then awarded refugee status or they have been granted leave to remain in the UK by the Secretary of State having been relocated to the UK pursuant to arrangements made by the Secretary of State under section 67 of the Immigration Act 2016 then, providing they apply for tax credits within one month of receiving notification of that refugee status or s67 leave, they will be treated as if they made their tax credits claim from the original date they claimed asylum. Prior to 6 April 2012, refugees had 3 months from being awarded refugee status to inform HMRC and receive longer backdating.
Faizah claimed asylum as a refugee on 12th May 2008 and was granted refugee status on 10th April 2012. She applies for tax credits on 8th May 2012 (within one month). The claim for tax credits is treated as being made on the date she claimed asylum (12th May 2008).
Zabia claimed asylum as a refugee on 28th September 2016 and was granted refugee status on 10th April 2018. She applies for tax credits on 29th May 2012 (more than one month after notification of her refugee status). Her tax credits are backdated by only 31 days from the date she applied.
It is important to note that any backdated amount due will be reduced by any support received under the Immigration and Asylum Act 1999 (such as NASS payments) unless any DWP backdating has already been reduced to take these payments into account.
HMRC state that most people are no longer able to make brand new claims for tax credits now that UC is available across the UK. HMRC’s position means that those who are granted refugee status, even if it would mean the tax credit claim is backdated to before UC was introduced, cannot claim tax credits and access those backdating provisions.
However, HMRC’s position has been challenged in the Courts. In July 2021, the High Court ruled that refugees, who claim within one month of notification of their refugee status, can make a backdated CTC claim from the date they sought asylum where that date was before the introduction of full service universal credit. See DK v HMRC 2021 EWHC 1845. Anyone in this position should seek urgent welfare rights advice to ensure they act within any time limits. At the time of writing it is not known if HMRC will appeal the decision.
Backdating is also possible by more than 31 days/1 month where entitlement to tax credits or where entitlement to one of the disability elements is dependent upon an award of a qualifying benefit. The rules for backdating disability elements changed on 6 April 2009 and further changes were made in January 2021 to clarify the rules.
Prior to 6 April 2009, when applying for tax credits, HMRC asked claimants to attach a letter to the claim form if they had applied for one of the qualifying benefits but had not yet received a decision. Providing they then notified HMRC within 93 days of the award of that qualifying benefit, backdating should have been given to the date from which the disability benefit was awarded or from the date of claim whichever was the later.
If there was an ongoing tax credits award, the claimant had to notify HMRC both when they applied for the qualifying benefit and then again within 3 months of it being awarded in order to receive backdating of more than 3 months.
From 6 April 2009, providing the claimant notifies HMRC within 1 month (3 months prior to 6 April 2012) of being awarded the qualifying benefit, the rules allow them to receive full backdating. There is no need to tell HMRC at the point when they apply for the disability benefit but, to have a disability element added to an existing award, they must tell HMRC within a month of when the disability benefit is awarded.
For new claims, the claimant would need to make their claim for tax credits within 31 days of the disability award decision, although from 27 January 2021, most people can no longer make a brand new claim for tax credits even where the backdated start date would fall into a period before 27 January 2021. Given the challenge above regarding refugee status, it is possible that this could be open to challenge if backdated entitlement exists for a period where the claimant was not able to make a UC claim. Specialist welfare rights advice should be sought in such cases.
If a claimant has moved to UC, but is then awarded a qualifying disability benefit, they can contact HMRC and receive backdating for the period that they were on tax credits. For example, Jemma applied for DLA for her son in May 2020. DWP say she is not entitled and she appeals. While waiting for her appeal, she claims UC in May 2021. Her tax credits end the day before her UC claim. In November 2021, she is successful at appeal and her son is awarded DLA from May 2020. As long as Jemma contacts HMRC within one month of the DLA award, she should receive backdated child tax credit covering the period May 2020 to May 2021.
Example of the rules (since 6 April 2009)
Sandra already claims child tax credit for her daughter, Amy. If Sandra applies for Disability Living Allowance for Amy in April 2019, and it is not awarded until October 2021 providing Sandra tells HMRC of the award of DLA within 1 month she can receive backdating of the disability element to April 2019. See our understanding disability section for more detail about longer backdating.
She is not required to tell HMRC in April 2019 when she applies for DLA.
Claimants receiving support from HMRC's Tax-Free Childcare scheme cannot also receive tax credit for the same period. The rules, found in SI 669/2015, mean that backdating of tax credits will be restricted to prevent tax credits being backdated to cover a period where the claimant (or either claimant) has previously been in receipt of or made a declaration of eligibility for tax-free childcare payments. See our tax-free childcare section for more information about the scheme.
There is one exception to this restriction on backdating tax credits to a period where a claimant had made a declaration of eligibility for TFC. Where no payments were made out of the childcare account by the claimant or their partner and the account has been closed, backdating of a tax credit claim can be allowed by up to 31 days even if this coincides with a period for which there was a declaration of eligibility for TFC. This is because some tax credit claimants have accidentally claimed TFC which has automatically terminated their tax credit award and so they have been required to make a new claim for tax credits. This prevents them from being disadvantaged providing there is a gap of no more than 31 days between the two claims.
The following information about backdating is contained in the HMRC manuals online:
- Contents (Tax Credits Manual)
- Backdating for Refugees
- Backdating due to the disability elements
- Eligibility due to the disability elements
- Evidence of an earlier claim (particularly useful for lost claim forms)
Last reviewed/updated 5 October 2021