ACCA - The global body for professional accountants
The responsibility is with the claimant to make sure automatic claim renewals are based on the right information
—Chas Roy-Chowdhury, head of tax, ACCA

But the new tax bands and new rates could make it complicated, says ACCA

The annual declaration deadline for Tax Credits is 31 July 2011, ACCA (the Association of Chartered Accountants) reminds claimants today. 

But the accountancy body’s head of taxation, Chas Roy-Chowdhury, says that the new tax bands and changes to the income limits for Child Tax Credits could complicate the renewal process. 

Chas Roy-Chowdhury says: 'Claims for tax credits can be automatically renewed, but it is likely that many who are eligible for this benefit will have to declare the changes that have happened to their income as a result of the change in tax bands at start of the new tax year in April 2011. Some existing claimants may discover that they are no longer eligible for the tax credits they currently claim.'

In June last year, the government announced that the combined income limit threshold for Child Tax Credit decreased from £50,000 to £40,000 from 6 April 2011. This change now means if a claimant’s income is over the new limit, their basic Child Tax Credit payment of £545 will be reduced, by 41p in the pound.

The government also announced that the maximum amount of the child element of Child Tax Credit was to increase from £2,300 to £2,555. The income disregard rate for Child Tax Credits has also decreased, from £25,000 to £10,000. 

Chas Roy-Chowdhury says: 'If a claim is not completed on time or correctly, a claimant for Child Tax Credit or Working Tax Credit could end up having to pay back money they thought may have been theirs based on previous claims. The responsibility is with the claimant to make sure automatic claim renewals are based on the right information. Claimants need to make sure that the Tax Credit Office is notified immediately – and ahead of 31 July - if there are any changes in circumstances, or if income is different to what is shown in the Annual Review notice, or if there are mistakes in the notice.'

Annual declaration packs for tax credits are issued by HMRC between April and the end of June 2011. If a pack hasn’t reached a claimant by 15 June, then they should call the Tax Credits Helpline: 0845 300 3900.