Are you missing out on tax credits?
There has been much commentary in recent months reminding tax payers who claim tax credits to file their renewals application before the 31 July deadline. But apparently, many applications have been made incorrectly, and as a result, claimants are not collecting the full amount to which they are entitled.
According to a recent announcement by HMRC, many parents do not realise that they need to deduct any statutory parental pay from their salary when renewing tax credits.
In more detail, HMRC advise:
Thousands of parents could be at risk of missing out on hundreds of pounds from their tax credits by accidently reporting their income incorrectly.
HMRC is urging parents to check their income to avoid potentially missing out on an average of £495 a year. Many tax credits claimants who receive statutory maternity pay do not realise that some of this pay should be deducted from their gross pay when their tax credits awards are calculated.
As well as maternity pay, parents can deduct any payments they have received for statutory paternity, shared parental or adoption pay up to a value of £100 a week.
HMRC estimates that parents who did not deduct their statutory maternity pay from their income could have been entitled to on average an extra £495 across the year. Around 35,000 people could potentially be missing out. A full list of what can be deducted is available on GOV.UK.
This is a welcome contribution by HMRC. Hopefully, the advent of digitised accounting by the tax office will mean that, in the future, these sorts of errors will be adjusted automatically. One can only hope…
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