HMRC internal manual

Tax Credits Technical Manual

TCTM05300 - Changes of circumstances: Effective Dates of Changes in Circumstances

Date of notification - Where the change results in an increase in tax credits

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 25

Changes of circumstances resulting in an increase in tax credits, such as a new child in the family, or the family starts to use registered or approved childcare, can be backdated to a maximum of 1 month.

The date of the change is either

  • the date 1 month before the date of notification, or if later
  • the date of the change.

 

COVID-19 Critical Workers {.filledcircle}

The one month to notify a change of circumstances which increases an award, does not apply to critical workers for the period from 23 May 2020 to the end of the Coronavirus Job Retention Scheme. During this period, critical workers have three months to report a change of circumstanes which increases an award.

 

COVID-19 Date of notification - Where the change results in an increase to the maximum rate

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 25A

Critical workers who report changes of circumstances resulting in an increase in tax credits such as a new child in the family, or the family starts to use registered or approved childcare, can be backdated to a maximum of 3 months.

This applies to changes reported by critical worker in the period from 23 May 2020 to the date the Coronavirus Job Retention Scheme ends.

The date of the change is either

  • the date 3 months before the date of notification, or if later
  • the date of the change.

 

Date of notification - Where the change results in a decrease of tax credits

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 21

Changes in circumstances which result in a decrease in tax credits are usually backdated to the date of the change.

For example

  • a child or young person leaves the family
  • changes in the adults heading a household, for example if a couple breaks up or when people begin living together as a couple.

However in certain circumstances the claimant may continue to be entitled to a ‘run on period’ of tax credits, for example if the claimants job ends or they cease to undertake work for at least 16, 24 or 30 hours per week, or if childcare costs have reduced by more £10.00 or more per week.

COVID-19 Critical Workers {.filledcircle}

The one month to notify a change of circumstances which decreases an award, does not apply to critical workers for the period from 23 May 2020 to the end of the Coronavirus Job Retention Scheme. During this period, critical workers have three months to report a change of circumstanes which decreases an award.

 

COVID-19 Date of notification - Where the change results in a decrease of tax credits

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 21A

Changes in circumstances which result in a decrease in tax credits are usually backdated to the date of the change.

Critical workers have three months from the date of change to report a change of circumstances resulting in a decrease in tax credits, such as a child leaving the family or changes to the adults heading the household.

This applies to changes reported by critical workers in the period from 23 May 2020 to the date the Coronavirus Job Retention Scheme ends.

For example, on 01 September 2020 a person reports their child no longer qualifies for the disabaility element from 10 June 2020. We will accept the changes as notified on 01 September 2020 and backdate the change to 10 June 2020. Overpayments may occur as a result.

In certain circumstances the claimant may continue to be entitlement to a ‘run on period’ of tax credits, for example if the claimants job ends ot hey cease to undetake work for at least 16, 24 or 30 hours per week, or if childcare costs have reduced by £10 or more per week.

 

 

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Disability and Severe Disability elements of WTC & CTC - Backdating

The Tax Credits (Claims and Notifications) Regulations 2002, Reg 26 & 26A

There are cases where changes in circumstances can be backdated more than 1 month. These are changes which result in an award of the disability or severe disability elements of CTC and WTC.

For the legislation on backdating the disability and severe disability elements of WTC, please see TCTM05310 

For the legislation on backdating the disability and severe disability elements of CTC, please see TCTM05320