Tax Credits: Claims changing

Once a claim has been processed and an initial award made it can be changed several times both during the tax year and after tax year ends.

Changes during a tax year

There are many changes that must be notified to HMRC within 1 month. A full list of these changes can be found in the changes of circumstances section.

Any change made to a claim during a tax year has to be made using either Section 15 or 16 Tax Credit Act 2002. These decisions carry a right of appeal.

More information about how these changes are made can be found in the Tax Credit Technical Manual on the HMRC website.

Changes which bring an award to an end

Some changes of circumstance mean a tax credit award will end. In some cases the claimant will need to make a separate, new claim for tax credits (for example, where they were part of a couple on a joint claim and are now single).

The types of changes which can bring a tax credit award to an end mid-year include:

This is not meant to be an exhaustive list but illustrates the types of changes which mean a tax credit award ends.

Now that universal credit (UC) is available across the UK, most people can no longer make a brand new claim for tax credits, although there are two exceptions. This means once the tax credit award ends, working-age claimants will find they need to claim UC for future support that was previously offered by tax credits and other benefits and claimants who have reached their qualifying state pension credit age (both claimants in a joint claim), will need to consider claiming pension credit for support. See our UC section for more information.

Changes during the renewal period

Once the tax year has ended, HMRC guidance to staff states that if a change is reported before the claimant has completed the renewals process and that change is one that does not increase the maximum rate, the change cannot be implemented until after the renewals process is complete. The change will therefore be implemented when the final decision for that year is issued following renewals. Further information can be found here.

Changes that affect the maximum rate, which are reported during the renewals period, will result in a ‘statement like an award notice’ (SLAN) being issued along with a provisional award notice including details of any up-rating.

Changes after final decision

Once a final, conclusive decision has been issued (under Section 18 Tax Credit Act 2002) it can only be amended in very limited circumstances even if it is incorrect. This includes final decisions made under the in-year finalisation process in relation to claiming UC.

The situations when a final decision can be revised include:

Formal decisions

Throughout the tax credits annual cycle there are a series of formal decisions made about tax credit awards.

Some decisions are provisional, some final and all formal decisions about awards are subject to the formal appeal process. This can throw up some issues about how the various decisions interact.

In June 2017, a 3-Judge panel handed down a decision on a case before the Upper Tribunal which seeks to clarify the way tax-credit decisions interact. See our appeals section for more information.

Tax credit decisions and universal credit

Where HMRC make a tax credit decision which brings a tax credit award to an end, if the claimant then claims universal credit, any subsequent change or revision to the tax credit decision can only take effect up to the date before the UC claim is made.

Last reviewed/updated 24 April 2019