Tax Credits: Renewals
Each tax credit claim lasts for a maximum of one tax year with a new claim must be made for each new tax year. The renewals process is used to finalise the claim for the year just ended and act as a new claim for the new tax year. At the end of each tax year, HMRC make a final entitlement decision on the award for the tax year just ended and, if appropriate, set up the claim for the new tax year using the renewals process. As tax credits ended on 5 April 2025, no live tax credit awards are continuing after that date so the usual renewals process in 2025 will just be used to finalise awards and not to set up any fresh claims.
- An outline of the process
- The finalisation process
- The finalisation packs
- Auto-finalisation
- Nil award claims
- Reply required
- The deadlines for 2025
- Online and HMRC app
- Provisional Payments
- Missing the deadline
In 2025, the process has been designed to reconcile entitlement for 2024/2025 with what has been paid. Although based on the traditional renewals process, the process for 2025 is in fact simply a finalisation process.
The process set out on this page is the full end of year finalisation process for 2025 for claimants who:
• Were entitled to a tax credits nil award, which means they were entitled to tax credits but did not receive any payments due to the level of their household income
• Were entitled to tax credits and received payments in 2024/2025 but were not eligible to move to universal credit or pension credit. DWP and HMRC did not issue migration notices or tax credit closure notices to people who would not be eligible for universal credit or pension credit.
• Were entitled to tax credits and received payments in 2024/2025 but the tax credit award ended mid-way through the tax year, for example because of a change in household from a joint to single (or vice versa) claim.
The process set out here does not apply to claims where people have been sent a migration notice or a tax credits closure notice inviting them to claim universal credit or state pension credit. In those cases, a different process called in-year finalisation will be used to finalise their claims. See our section on Universal Credit - Finalising Tax Credit Claims for more information.
HMRC have information about the process on GOV.UK aimed at claimants.
The finalisation process after 5 April 2025
The claim for 2024/2025 was based initially on the claimant’s circumstances for that year, and income for 2023/2024. The purpose of the finalisation process is to establish the claimant's income and circumstances for 2024/2025. The award is finalised by reviewing any changes of personal circumstances during the year and comparing the claimant’s actual household income for 2024/2025 with that for 2023/24 , so that their final entitlement for 2024/2025 can be established.
The income comparison works like this for finalising 2024/25 awards:
- If 2024/25 income is less than 2023/24 income by £2,500 or less, the final award is based on 2023/24 income and there is likely to be no change in finalised award.
- If 2024/25 income is less than 2023/24 income by more than £2,500, the final award will be based on 2024/25 income plus £2,500. There is likely to be an underpayment.
- If 2024/25 income is greater than 2023/24 income by £2,500 or less, the final award, like the initial award, is based on 2023/24 income and there is likely to be no change in the finalised award. Thus an increase in income of £2,500 or less is disregarded (hence the £2,500 is commonly known as 'the disregard').
- If 2024/25 income is greater than 2023/24 income by more than £2,500 the final award is based on 2023/24 income less £2,500 and there is likely to be an overpayment. (Note, this ‘disregard’ figure changed from £5,000 to £2,500 from 6 April 2016 affecting claims for 2016/17 onwards).
So an initial tax credits award is made in the year of payment, then finalised at the end of the year to produce in many cases an underpayment or overpayment.
HMRC will send claimants a review form. Most people will have their 2024/25 awards ‘auto-finalised’ based on the information HMRC hold. Claimants who are in this group should check that the income figures HMRC hold are correct and let them know if anything is wrong, missing or incomplete. A small number of people will be required to provide information to HMRC by the deadline in the notice – this is called a reply-required.
HMRC have two different types of pack that they send to claimants. These are:
- A TC603R auto-finalisation form; or
- A TC603RR plus TC603D (reply required finalisation)
plus guidance notes (TC603R or TC603RD).
For the finalisation exercise in 2025, most claimants will be sent auto-finalisation packs, but HMRC will still send reply-required notices to some people.
For auto- finalisations, claimants are asked to check the information replayed to them in their finalisation paperwork and they only need to contact HMRC if they need to tell HMRC anything is incorrect, missing or has changed. The award for 2024/2025 will be automatically finalised after the deadline date in the finalisation pack if the claimant does not contact HMRC.
Even though some auto-finalisation forms will show income figures provided by an employer or occupational pension provider, it is important that claimants still check to see whether they have other income or can make any deductions from the figure provided by their employer as income for tax credits purposes is not the same as income for tax purposes. See our RTI and tax credits section for more detailed information on what should be checked.
If the claimant is not an auto-finalisation case, they must reply to the TC603RR (annual review) and complete and return the TC603D declaration form with details of their income for 2025 (the tax year just ended). This can be done by telephone or post (see our contacting HMRC section for more details):
- Posting the form back to HMRC
- Phoning the helpline and speaking to an adviser
- Phoning the helpline and using the ITA automated system.
Since April 2014, HMRC have had access to real time information income data from employers and occupational pension providers. They will replay this information on the TC603RR form. It is important that claimants still check to see whether they have other income or can make any deductions from the figure provided by their employer as income for tax credits purposes is not the same as income for tax purposes. See our RTI and tax credits section for more detailed information on what should be checked.
HMRC say that the deadline for replying to the finalisation packs will be 30 days from the date the finalisation notice is issued, for both auto-finalisations and reply-required finalisations. Claimants who do not yet know their actual income for 2024/2025 can give HMRC an estimate of their 2024/25 income but they should do that before the date on the notice. They will then have until 31 October 2025 to confirm to HMRC their actual income.
Once HMRC have finalised the award, claimants should receive a 2024/25 final award notice. They have 30 days from the date of that decision notice to start an appeal if they think anything on the notice is incorrect.
The deadlines for finalising 2024/25 claims are different this year. Claimants are advised to check their notices carefully and, where instructed, contact HMRC by the deadline on their finalisation notice (which should be at least 30 days from the date the notice is issued to them). The usual 31 July deadline and 31 January deadline (for people who initially finalise with an estimate of income) do not apply.
Prior to 6 April 2010, if a couple separated during the renewals period, and one member of the couple did not complete their forms an overpayment would occur of payments between 6 April and the date they separated. This was the case even if one partner completed their renewal forms.
But legislation, effective from 6 April 2010, allows one member of a couple to finalise the previous year’s claim (and, prior to 2025, renew the claim for the period following 6 April to the date before the separation). If only one member responds, the award will be based on the information provided which may not be accurate. HMRC have advised that, where possible, it is still recommended that both members send back their forms.
It is vital to complete and return finalisation papers when required to do so. It is important that the claimant checks the personal circumstances listed and informs HMRC if any of them have changed.
Online and HMRC app
HMRC’s digital service will not support tax credits after 5 April 2025. This means their online tax credits service ‘Manage your tax credits’, the HMRC app and access to tax credits information via the personal tax account will no longer be available for tax credits. Claimants who need to contact HMRC to finalise their tax credit awards will need to do so either by telephone or by post. (see our contacting HMRC section for more details).
There will be no provisional payments in 2025 because tax credits end on 5 April 2025 and no live tax credits awards will be set up after that date.
If the claimant misses their deadline to reply to HMRC, HMRC will finalise the award on the information they already hold. Claimant’s will be sent a final award notice for their 2024/2025 award and, if they disagree with HMRC’s decision, they can follow the appeals process in the usual way.
Last reviewed/updated 9 April 2025