News

A leading charity says HMRC letters may be misleading customers about child tax credits.

Many people will lose their child tax credits from 6 April when the income limit to qualify is being cut.

 

Low Incomes Tax Reform Group (LITRG), a leading tax reform charity, says that HMRC letters advising parents about tax credit changes are misleading.

At the moment, you can usually get child tax credit if your income is not above £41,300.

The letter which has been sent to 1.3m homes says the income limit to get child tax credit from 6 April 2012 is £26,000.

The charity points out that that figure is for one-child families only and the limit is higher where there are two (£32,200), three (£38,800) or five or more (£51,900) children.

If a parent also pays for childcare, or is disabled, the limits can be higher still.

 
Parents whose tax credit is stopped in April may not realise that they may later become entitled if their circumstances change or they have more children.

HMRC says the letter is "not incorrect" but "not worded as well as it could be" and apologises if any confusion has been caused.

 

If you a have tax credit query you can contact the HMRC's tax credit advice line on 0345 300 3900.