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HMRC internal manual

Tax Credits Technical Manual

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HM Revenue & Customs
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Changes in circumstances: Changes in circumstances that must be notified (mandatory)

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 21 and the Tax Credits Act 2002, Section 32

There are prescribed time limits attached to the notification of a change of circumstances.

If the change results in tax credits being reduced or stopping because:

  • Of changes in the adults heading a household, for example, if a couple breaks up or when people begin living together as a couple;
  • The claimant (or in a joint claim, either claimant) loses their right to reside in the UK or is no longer classed as being in the UK. This includes claimants who have been temporarily out of the UK for more than 8 weeks, or 12 weeks if its because of their illness or the illness or death of a partner or relative;
  • An award of WTC contains a child care element and the claimant stops paying for childcare for at least 4 weeks in a row;
  • The award of WTC contains a child care element and the relevant weekly childcare cost goes down by at least £10 a week, or are reduced to nil, for at least 4 weeks in a row (further details on how to calculate average weekly childcare costs can be found at TCTM02640);
  • A claimant, or their partner stop working:-

    • the required hours for WTC entitlement. This could be 16, 24 or 30 hours a week (see TCTM02410)
    • at least 16 hours a week for entitlement to the disability element (see TCTM02501)
    • at least 16 hours a week for entitlement to the childcare element (see TCTM02610)
    • the required hours for entitlement to the 30 hour element (see TCTM02313)
    • the required hours for entitlement to the second adult element (see TCTM02314)
  • A child or qualifying young person leaves the family and moves to live with someone else. This includes children who have been taken into care, or fostered to another family. It also includes children who have been found guilty by a court and sentenced to custody or detention for a period of more than 4 months;
  • A qualifying young person that the claimant is responsible for leaves full time education, or approved training before they reach 20 or stops being registered with a careers service, Connexions Service or equivalent;
  • A claimant has given notification that a child is expected to undertake full time non-advanced education or approved training after the 31 August following the date they attain the age of 16, but that child does not go on to undertake full time, non-advanced education or approved training;
  • A child dies.

The change must be notified within 1 month of the date the change occurred, or if later from the date the claimant realised there had been a change, unless advance notification had already been given.

Prior to 6 April 2007 the change must have been notified within 3 months of the date the change occurred, or if later from the date the claimant realised there had been a change, unless advance notification had already been given.

There is a risk of being overpaid tax credit if HMRC are not told of these changes.

Penalties of up to £300 may also be levied.