According to the HMRC, between the 25^th of April and the 27^th of May, around 2.1 million renewal tax credit packs will have been sent out to working people who claim tax credits. For most people, the deadline for renewing tax credits is the 31st of July 2022.

There are two types of renewals sent out. HMRC advises that if you have received a letter with a red line across the first page with “renew now” wording, you must take action and renew your tax credits. This usually means updating your circumstances and providing you and your partner’s total income for the last tax year (the 6th of April 2021 to the 5th of April 2022). You can do this online or by post.

Alternatively, if you have received a letter with a black line across the first page with the wording “check now”, you are advised to check that your details are correct and simply wait for your tax credits to renew automatically.

If you are self-employed, the renewal process for the tax credits is slightly different. You will be asked to work out your profit. Your profit can be found on the self-assessment from the previous year. If you have more than one business, you will have to add up profits from each one of your businesses. However, if you did not complete your self-assessment, you will have to estimate the profit and provide an actual figure later.

Please be aware that there are different deadlines for the self-assessment tax return for the tax year 2021-2022. 

• If you did not fill in the self-assessment last year, and you need to send one this year, you will have to register for self-assessment by this date - The 5th of October 2022
• If you are sending a paper tax return, your deadline is this date - Midnight, 31^st of October 2022
• If you are submitting your tax return online, your deadline is this date - Midnight, 31^st of January 2023

You can submit your self-assessment as soon as the previous tax year ends. For the tax year 2021-2022, the earliest date for submission was the 6^th of April 2022.

You will save time and possible complications by submitting your self-assessment before the tax credits renewal date, as this avoids using estimated figures. But, more importantly, you will know precisely how much tax you will owe or if you are due a refund. Moreover, providing accurate figures to HMRC will also ensure that your tax credits are correct and you are not being overpaid. In the worst-case scenario, your tax credit payments might be stopped due to incorrect estimations.

If you miss the deadline for the tax credit renewals, you will be sent a statement. You should contact HMRC within 30 days from the statement date issue. If you do so, your payments may be restored without paying anything back.