Tax Credits: don't miss this Friday's deadline

The credits are misleading, and a misnomer, but they can add thousands of pounds to your income.

Having interrogated the system for our new Tax Credits guide, in time for Friday's 'renewal' deadline, we could almost cry at the system's sheer unfathomable, unnecessary complexity.

Here are some of the problems:

• Tax Credits aren't tax credits. The name is ugly and misleading. These aren't a credit taken off tax owed, they're simply a benefit paid into bank accounts to help families with children or those in work on lower salaries.

• Renewal isn't renewal. The TV adverts shout "RENEWAL", implying it's only about assessing your eligibility for tax credits so you're paid over the next year. This leaves those who don't plan to claim this year thinking they needn't do anything. Yet the form is also to CHECK you were correctly paid last year. Fail to reply and you face a fine. So why call it renewal?

• Overpayments are unavoidable. Nothing creates more tax credit angst than overpayments. Getting too much money sounds good, but it isn't when you've spent it, then the Government says: "Pay it back." Yet this can happen even if you do nothing wrong, as payments are estimates based on last year's earnings, so small changes can leave you overpaid.

While Tax Credits are welcome, the system causes much misery and confusion, and should be changed.

Yet, for now, as the payouts are worth it, we have to live with it, and that's why we've done a full guide.

Further reading/Key links

Tax credit guide: www.moneysavingexpert.com/taxcreditsCheck benefits: www.moneysavingexpert.com/benefits