Tax Credit Deadline 31 July. Seriously. Do it now.
It’s July. The sun is shining (or not), the children are about to finish school (or have already). You are probably thinking about holidays, childcare, barbecues, anything but that annoying but necessary task for the end of the month.
That’s right, 31 July is the deadline for renewing your tax credits form, which governs your entitlement to both Child Tax Credit and Working Tax Credit. And don’t be fooled into thinking you can have another Pimms/beer/hard liquor and that you’ll get round to it. Do it now, or you’ll be sorry.
You see, a tax credits award is based on figures for the previous tax year, so for a 2011/12 claim for Tax Credits, the amount awarded is based on income figures for 2010/11, the tax year which ends on 5 April 2011. However, unless you are very anal indeed, it is highly unlikely that on 5 April 2011 you will actually know the final figures for all your income etc. So your tax credit award is provisionally based on the income from the pre-previous tax year, in this case 2009/10 on the understanding that you will update the tax credit people with the actual figures for 2010/11 by 31 July 2011 when you renew your claim.
Now if you suffer large fluctuations in income, or in childcare costs for example, you are supposed to tell them as you go along, so they can adjust your tax credits so you don;t end up with an underpayment. But if your income/costs remain fairly constant, you might think it’s not that important to return the form by 31 July. After all if the numbers are the same, the claim will just continue the same, right?
Wrong wrong wrong wrong. Let me share with you a little vignette of a telephone conversation with the tax credits office might go if you don't get your form in on time...
Tax Credit Claimant: Hello Tax Credit Office, there appears to be some mistake. You have sent me a letter saying I owe you £200.
Tax Credit Office: Yes.
Tax Credit Claimant: But my tax credits are about £550 a year. And you haven’t paid me that much, in fact you’ve only paid me £200. How can I owe you money? You owe me £350.
Tax Credit Office: You didn’t return your form by 31 July. Therefore your claim for 2011/12 has not been renewed. We want the £200 back that we paid you between April and July.
Tax Credit Claimant: Well I’ll send the form back now then, and then you won’t need the £200 back.
Tax Credit Office: No. You can’t. You cannot now make a claim for 2011/12. You owe us £200.
Tax Credit Claimant: But this is ridiculous. I have a valid claim for £550, but you are not only saying I can’t get the remaining £350, I have to repay the £200?
Tax Credit Office: Yes.
Tax Credit Claimant: But that is ridiculous. I want to complain or appeal.
Tax Credit Office: You can appeal, but you won’t be successful. You had three months to get your claim form back. And you don’t have a valid excuse. So you don’t get Tax Credits, and you have to pay us back.
Tax Credit Claimant: My husband had life threatening cancer and had a serious operation. He could have died, and still only has a 50/50 chance of making it.
Tax Credit Office: That is not a reasonable excuse.
So be warned. Get your form in on time, as unless you are actually dead yourself, you will lose your claim entitlement. And have to pay them money back. Go do it. Now.