Every HMRC change you must tell the taxman or risk a £3,000 fine

Hundreds of thousands of people on benefits are being warned they could lose money or face fines. HM Revenue and Customs has sent letters to 730,000 people warning that time is running out to inform them of any changes to their situation.

Anyone who has had a change in their lifestyle, whether it’s finding a new job, moving in with a new partner or leaving their children at home or school, should tell the taxman if the change could affect their claim . And they are warned they have just a few weeks to do it, with a July 31 deadline.

Anyone who doesn’t notify the changes could lose tax credits and end up with less money in their accounts. The tax credit system is due to be replaced by Universal Credit next year, with most people already switching to Universal Credit.

However, thousands remain on the old benefit and must report the changes. Andy Wood, tax expert from Tax Natives, said: “If you are a tax credit claimant, you should inform HMRC of any changes to your situation, such as changes in living arrangements, childcare situations or employment status.

“Failure to do so could lead to major financial consequences such as the loss of tax credits or fines of up to £300. Failure to comply with reporting requirements can have serious repercussions such as loss of tax credits, refund claims and even fines of up to £3000 if incorrect information is provided.”

You must tell HMRC immediately if:

• Life circumstances change, for example you start or end a relationship, move in with a new partner, marry or form a civil partnership, separate permanently or divorce
• Your child or partner dies (you don’t need to tell HMRC if you’ve already used the Tell Us Once service)
• The child stops going to childcare for four weeks or more when they would normally go
• Childcare costs stop, fall by £10 or more a week or you start getting help for them
• The child leaves home, for example, moves or enters care
• The child is taken into custody
• The child over 16 leaves approved education or training or a careers service
• The childcare provider is no longer registered or approved
• Working hours fall below 30 hours per week (combined if you are a couple with children)
• Hours of work are below or above the minimum required for qualification

You must also tell HMRC straight away if:

• go abroad for 8 weeks or more
• leave the UK permanently or lose their right to stay in the UK
• start working less than 16 hours while claiming childcare costs – except in certain situations
• they have been on strike for more than 10 consecutive days

According to the HMRC website, failure to do so could prove costly. He warned: “If you get tax credits you’re not entitled to, you’ll have to pay the money back. You may also have to pay a penalty.”

He added: “You must report these changes within 1 month. If you report changes as soon as they happen, you’re less likely to be paid the wrong amount.

“You can be fined up to £300 if you don’t report certain changes within 1 month and up to £3,000 if you provide wrong information. If you estimated your income when you renewed your tax credits – for example, because you’re self-employed – tell HMRC your actual income by 31 January.”

You should also inform HMRC as soon as possible about a number of other changes. You should tell HMRC as soon as:

• you have any change in income (report this straight away if it rises or falls by £2,500 or more)
• increase your working hours to 30 hours or more per week (combined if you are a couple with children)
• to have a child or take responsibility for another child
• you start or stop claiming benefits for yourself or a family member, or those benefits change
• you start or stop having a disability that puts you at a disadvantage in getting a job
• you get certified that your child is blind or their certification ends
• start paying for registered or approved childcare
• you no longer get help with childcare costs

You should report these changes within 1 month to ensure you get everything you’re entitled to. Payments cannot usually be backdated further than this.

Claimants should have received a renewals pack by June 15, but anyone who hasn’t received one should contact HMRC to check the issues and avoid potential delays. Some people may have their application automatically renewed.

Andy Wood advised: “If you are eligible for automatic renewal, check the specified code ‘TC 603 R’ and the accompanying letter in your renewal packet. This simplifies the process and minimizes the burden, ensuring continuous receipt of tax credits without unnecessary delays. . Your tax credits will automatically renew if your renewal form has a “TC 603 R” code.

He added: “You must review your renewal pack and report any changes to HMRC by the end of July. These changes include living arrangements, childcare situations and employment status. For example, if childcare costs fall by £10 or more each week or working hours fall below 30 hours per week (combined for couples with children), report it to keep your tax credit claim accurate. “