Changes in circumstances for tax credits

The payment of tax credits is based not just on the income of the household but also the circumstances of those people included in a tax credit award notice. This includes the children or qualifying young persons as well as the claimants.

Therefore, when advising a client regarding tax credits, it is important that you have a thorough understanding of the circumstances which might affect a claim. For example, this could be whether there are any disabilities in the household, or childcare payments which may impact on the level of the tax credit award.

In most cases, your client’s personal circumstances will not change during the year, although the annual household income will vary.

When changes occur, it is important that the Tax Credit Office is notified within the required deadlines, otherwise the claimant may lose entitlement to tax credits for the period for which notification was not made.

Changes that result in a reduction in entitlement to tax credits will be backdated to the date of the change, whereas any change that results in an increase in the tax credit award can, in most cases, only be backdated by a maximum of 31 days.