Working tax credit claimants received additional support from Rishi Sunak recently, as the Chancellor detailed in his 2021 budget that claimants will get boosted payments to cover the next six months. It was confirmed this would be provided through a one-off payment of £500 and yesterday, HMRC updated the details on this.
HMRC confirmed the payment will be non-taxable and it will not affect the recipients other benefits (if they’re claiming them).
The £500 payment will not need to be declared as income for Self Assessment tax returns or for tax credit claims and renewals.
The new payment is being introduced to provide extra support for when the temporary increase in working tax credit, launched in April 2020, ends on April 5.
This extra payment will not need to be claimed manually, HMRC will contact claimants by text message or letter to confirm if they’re eligible.
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It should be noted this payment will not be seen on the online tax credit service.
Claimants should also be aware they have until April 8 to inform the Government that they have changed bank details to ensure the payment comes through with no issues.
Working tax credit has been largely replaced by Universal Credit but in some circumstances, it may be possible to put through a new claim.
New claims work working tax credit can only be made by those who are already getting child tax credit.
So long as a claimant is eligible, they’ll receive between £122.50 and £3,220 per year in support, depending on their circumstances.
This money is paid directly into the claimant’s bank or building society accounts in weekly or monthly instalments.
Usually, claimants will be paid from the date of their claim up until the end of the tax year (April 5).
For those who are able to make a new claim, they’ll need to do so through their working tax credit by reporting a change in their circumstances online or over the phone.