Tax Credits: DWP confirm changes to reporting rules – coronavirus impact

Tax credits come in two forms: Working Tax Credits (WTC) or Child Tax Credits (CTC). They are currently being phased out but there are ways that people can still apply for them now.

READ MORE

  • Mortgage holiday: FCA set out new extension proposals

Some people may be able to make a claim for tax credits if they get the severe disability premium or are entitled to it.

They’ll also be eligible if they were entitled to the severe disability premium for the preceding month and they’re still eligible when applying.

Receivers of Tax credits are usually required to report a change of circumstances to the state which may affect their payments and force them to convert to Universal Credit.

However, today the DWP confirmed that new coronavirus themed exceptions are in place for this.

As the government’s website confirmed: “If you’re currently getting tax credits and you cannot work or you’re working fewer hours because of coronavirus, you do not need to tell HMRC about this change as long as you’re still employed or self-employed.

“You must still tell HMRC about other changes to your circumstances.

“This includes if you or your partner lose your job, are made redundant or cease trading.”

This will likely be relieving for Tax Credit claimants who may have had their income affected by the lockdown and continue to see coronavirus impact the economy.

DON’T MISS:
State pension: Payments can’t be boosted if these benefits are claimed [INSIGHT]
Martin Lewis: How to slash your council tax bill [EXPERT]
Martin Lewis issues warning as Halifax overhauls account [WARNING]

Both forms of Tax Credits have rates which are dependent on certain elements.

The basic element of Working Tax Credit will pay a rate of £3,040 per year.

There are additional rates for other circumstances as detailed below:

  • Couple and lone parent element – £2,045
  • 30 hour element – £825
  • Disabled worker element – £3,220
  • Severe disability element – £1,390

READ MORE

  • Income tax warning: Rates may be raised

Child Tax Credit has slightly different rules where payments are offered at a maximum based on the size of the family.

The maximum eligible cost for one child is £175 per week and this increases to £300 for two or more children.

In total, the percentage of eligible costs the state will cover is 70 percent.

There are also additional elements/rates for these maximum payments:

  • Child Tax Credit family element- £545 (per year)
  • Child element – £2,830
  • Disabled child element – £3,415
  • Severely disabled child element – £1,385

While changes to working arrangements rules have been eased, there are still a number of changes in circumstance which need to be reported to HMRC.

Examples can include living or moving changes, changes to a child’s circumstances or family separation.

Reporting these kinds of changes must be done within one month of them occurring.

This is important as a person could be fined up to £300 if they are delayed in reporting their changes.

On top of this, up to £3,000 can be fined if the person gives wrong information to HMRC.

Source: Read Full Article