Get tax credits or Tax-Free Childcare? You need to tell HMRC if your circumstances have changed post-Covid
If you get tax credits you now need to tell HMRC if your working hours haven't returned to pre-Covid levels, while those who get Tax-Free Childcare must now prove their income. That's because a temporary relaxation of the eligibility criteria during the height of Covid for both benefits is coming to an end, and you are expected to notify the tax office of any permanent changes.
See our Tax credits and Tax-Free Childcare guides for more info on how these benefits work and who can get them.
Get working tax credits? You need to tell the tax office if your hours haven't returned to pre-Covid levels
Post-Covid you must now work a certain number of hours each week to qualify for working tax credit (WTC). For example, those aged between 25 and 59 need to work 30 or more hours each week to receive WTC, while this decreases to 16 hours a week for all those aged 60 and above.
During the worst of the Covid pandemic, people on WTC did not need to tell HMRC about temporary short-term reductions to their working hours as a result of coronavirus or because they were furloughed - reductions that in normal times would make you ineligible. During the height of the Covid you were effectively treated as if you were working your normal hours.
But this temporary support is ending on 25 November, so you've got one month from then to tell HMRC if your hours have not returned to normal as shown in your WTC claim. Fail to inform HMRC of any changes and you may have to hand back any overpayments, and you could also face a penalty fine of up to £300.
You don't, however, need to get in contact with the tax office if you return to working your usual hours before 25 November.
If you're no longer eligible to receive tax credits, other sources of Government help are available and you may be able to apply for Universal Credit instead. See our Universal Credit guide for the full breakdown. You might also be able to apply for Pension Credit if you and your partner are state pension age or over.
Plus, if you're no longer eligible for WTC, you will remain entitled to Child Tax Credit if you already receive it and have not yet made a claim for Universal Credit.
Get Tax-Free Childcare? You need to prove you're earning at least £142/wk
Similarly, in pre-Covid times you needed to earn an average of £142/wk to claim up to £2,000/yr per child towards childcare costs. During the pandemic, the rules were temporarily relaxed for those on furlough or who made claims for the self-employment income support scheme (SEISS). The temporary rule relaxation meant those whose earnings dropped below £142/week could still claim the benefit.
But now, when you next confirm your eligibility for tax-free childcare, which you need to do every three months, you'll need to prove you're earning at least £142/week. See our Tax-Free Childcare guide for a full breakdown of how this benefit works.
If the removal of the temporary rules means you're no longer eligible for Tax-Free Childcare, you might be able to claim back up to 85% of your childcare costs through Universal Credit instead.
The £20/wk Universal Credit uplift is also ending - check you're not missing out on benefits
Last year, the Government increased the Universal Credit standard allowance by £20/wk in response to the coronavirus pandemic – from £317.82/wk to £409.89/wk for a single person aged 25 or over. But this uplift ends on 6 October.
To ensure you're not missing out on vital benefits, check you're getting everything you are entitled to with our 10-minute Benefits Checker. You may be entitled to extra payments or other support, for example, so it is also worth visiting our Coronavirus Universal Credit and Benefits guide to find out more.
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