The DWP is warning of a fine of more than £3,000 for anyone claiming tax credits

Thousands of benefit claimants are being warned they could lose money or face fines. HMRC has sent letters to 730,000 people warning them that there is not much time left to notify them of the changes.

Anyone who has had a change in their lifestyle – such as finding a new job, moving in with a new partner or children leaving home – must tell HMRC. This is because it could affect their claim.

People have just a few weeks left to tell HMRC, with a 31 July deadline looming. Anyone who doesn’t tell HMRC about the changes could lose tax credits and end up with less money in their accounts.

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The tax credit system is set to be replaced by Universal Credit next year, with most people already switching to Universal Credit. But thousands remain on the old benefit and must report the changes.

Andy Wood, tax expert at Tax Natives said: “If you are a tax credit claimant, you should inform HMRC of any changes in your circumstances such as changes in living arrangements, childcare situations or employment status. in major financial consequences such as 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 your 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 HMRC’s website, not notifying the changes 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. These include:

• Any change in income (report this straight away if it rises or falls by £2,500 or more)
• Increasing working hours to 30 hours or more per week (combined if you are a couple with children)
• Having a child or taking 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
• Obtaining your child’s certification as blind or their certification ending
• Start paying for registered or approved childcare
• Stopping help with childcare costs

You should report changes within a month to make sure you get everything you’re entitled to. Payments cannot usually be backdated further than this.

Claimants should have received a renewal pack by June 15 – but contact HMRC if you haven’t. Some people may have their application automatically renewed.

Mr Wood said: “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 are asked to review the 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 per week or working hours fall below 30 hours per week (combined for couples with children), report it to keep your tax credit claim accurate. “