The Low Incomes Tax Reform Group (LITRG) is urging tax credit claimants whose work is still affected by the pandemic to check their position with HMRC after special coronavirus tax credit easements ceased on 1 October 2021.
In response to the pandemic, HMRC introduced easements for tax credit claimants, including special rules for those who could not work their normal hours because of the pandemic.
These allowed individuals to continue claiming tax credits as if they were working the same hours as before the pandemic despite being on reduced hours.
From 1 October 2021, new rules replaced the special provisions, meaning the point at which a claimant needs to notify HMRC about their situation depends on whether they expect their hours to return to normal by 25 November 2021.
If they do, they need to tell HMRC on 25 November if their hours do not return to the required level for tax credits. If they don't, they must inform HMRC immediately, which will treat the change as permanent and cease tax credits after a further four weeks.
Victoria Todd, head of LITRG, said:
"The tax credits easements introduced due to the pandemic were welcome for claimants. It is unfortunate but not unexpected that the rules for the ending of the working hours easement are so complex."
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