Parents whose children are heading off to college for A-levels, further education or approved training courses must tell HM Revenue & Customs (HMRC) or risk losing out on child tax credits and child benefit.

HMRC has urged families to let it know what their post-GCSE teenagers are doing to ensure they don't miss out on benefits worth thousands of pounds a year.

Its annual call for action happens because when a 16-year-old finishes their final year of compulsory schooling, the taxman assumes they have left to join the world of work. This triggers an end to child tax credits and child benefit payments for them.

To stop this happening, affected parents must contact HMRC to let it know what their child is doing. To carry on qualifying for the benefits, this will usually be A-levels, vocational qualifications or Government-approved training courses.

They must also inform the taxman if their child starts a college course in September but later decides that it's not for them and leaves. This will avoid the need to repay overpaid benefits at a later date.

Nick Lodge, HMRC director general of benefits and credits, says: "It's important that customers let us know what education their son or daughter is undertaking after they turn 16 so that we can ensure they receive the correct benefits".

Martin Lewis
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My family is affected how do I update HMRC?

Parents can let the taxman know what their child is doing either by logging on to HMRC's website and updating their personal digital tax account or calling 0300 200 3100. For those who haven't set up a digital tax account, you'll need the following info: your national insurance number and a recent payslip or a P60 form (though a passport can be used if you can't find these). You'll also need a mobile phone to be sent the HMRC security access code.

The deadline is midnight on 31 August and although there won't be penalties if parents miss it, they will miss out on vital payments.

To try to ensure eligible families don't miss out, the taxman puts a reminder about the need for updates about a 16-year-old's education status in renewal packs for tax credits sent out once a year. Although there is no similar reminder for parents benefiting from child benefit payments, HMRC uses social media including Twitter to try to raise awareness.

However, in many cases, it relies on parents who don't realise they need to act to get in touch when they notice the benefit payments have stopped.

What's the background to all this?

As recently as 2012, as many as one-in-five 16-year-olds dropped out of formal education.

Although the school-leaving age is still officially 16 in England, Wales, Scotland and Northern Ireland, it's effectively 18 in England because the Government has ushered in new rules which determine that anyone leaving their school must:

  • stay in full-time education, eg, at a college
  • start an apprenticeship or traineeship
  • work or volunteer (for 20 hours or more a week) while in part-time education or training

However, there are those who end up leaving formal education to take on part-time work and sign up to a course which may not be approved by the Government. It is in these types of cases where the automatic stopping of the benefit applies, an HMRC spokesperson says.

It advises anyone unsure what their child's education status is to get in touch to make sure they keep receiving the correct payments.

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