From 25th November, you must tell HMRC about any changes to your working hours. If you don’t, you’ll have to give back any Working Tax Credit overpayments you receive and you might get a fine.
What’s new about this deadline?
One of the Working Tax Credit rules has always been that you must tell HMRC about any changes to your employment situation. Because the amount of credit you get is directly related to how much you earn. You already know this.
But HMRC changed this rule as part of their COVID-19 response. Last year they said that claimants didn’t need to let HMRC know about any short-term employment changes that were due to the impact of COVID-19. So, things like being put on furlough, or having your working hours reduced, weren’t reportable.
Not only that, but people still got the same amount of Working Tax Credit. A very real support during a financially unstable period.
So this deadline isn’t the signal for something new, but is a return to pre-COVID regulations. From the 25th November, if your employment situation doesn’t go back to its prior norm, you need to inform HMRC as quickly as possible.
Why is HMRC making this change?
Like everyone else, HMRC’s trying to get back to normal service. Removing this Working Tax Credit administrative burden was helpful to HMRC, as it implemented all the new COVID-19 support packages and necessary Brexit procedures simultaneously. But now that many government COVID-19 support schemes are ending, HMRC can get back to their usual business.
HMRC’s Director General for Customer Services, Myrtle Lloyd, said: “We introduced this measure last year to help support working families. It is vital that Working Tax Credit claimants who have benefitted from it update HMRC with their working hours if they have reduced, and they won’t return to their normal level before 25 November.
“Anyone who is no longer eligible for Working Tax Credit due to a change in their circumstances may be able to apply for other UK Government support, including Universal Credit.”
What happens if I don’t tell HMRC about any permanent changes?
You have one month from any permanent employment change to tell HMRC. ‘Permanent change’ means things like being made redundant, alterations to your regular working hours and getting a new job.
Your Working Tax Credit is linked to your working hours and this rule is to make sure that the system is fair. To make sure you get what you’re entitled to and that HMRC aren’t losing out to fraudulent claims.
If your situation changes from the 25th November, you’ve got until 25th December to tell HMRC. There’s a substantial fine if you don’t – £300 straightaway and then £690 per day. There’s also the possibility of an additional £3,000 penalty for giving HMRC incorrect information. Also, if you’ve been given Working Tax Credit when you weren’t entitled to it, you will have to repay the amount in full.
How do I tell HMRC about Working Tax Credit changes?
None of this is anything to worry about. Just make sure you communicate with HMRC as and when your employment situation changes. You can report any changes online here, using your Government Gateway account.
If you want to ask any questions about your Working Tax Credit situation, HMRC has a dedicated helpline on 0345 300 3900. And they are there to help. Any doubts, get in touch with them. Don’t ignore it and end up wasting your hard earned money on fines.