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In this case they are not renewing merely finalising the old claim. One of the functions of the renewal process is to establish the claimant's income for the current year, and to review any changes of personal circumstances during it, so that their final entitlement for that year can be established.Having established the claimant's income for the current year, it is used, together with their latest set of personal circumstances, to set the initial award for the coming year. The initial claim for 2016/17 was based on circumstances current in 2016/17 and income for 2015/16.A complaint letter should also be sent to HMRC with a request for compensation equal to any tax credits and passported benefits that have been lost as a result of HMRC’s misleading information.HMRC did not run this exercise for the 2013/14, 2014/15 or 2015/16 tax years.The letter stated that the income limit for CTC was £26,0-2013, however this only applied if the claimant was part of a couple with one child.The limit for people with more than one child, qualification for any of the disability elements or who claim help with childcare costs was significantly higher.We understand that HMRC allowed some claimants slightly longer than 30 days to respond depending on when their letter was sent.The other issue with the letter that HMRC sent out in March 2012 was the income limits stated in the letter were misleading.

The comparison works like this for finalising 2016/17 claims (concentrating only on income and leaving aside changes in entitlement which are due to changes in circumstances): So an initial tax credits award is made in the year of payment, then revised at the end of the year to produce in many cases an underpayment or overpayment.

Concerns were raised by various organisations, including Low Incomes Tax Reform Group, that claimants would allow their claim to lapse based on incorrect information and that they would not ask HMRC to renew their claim even though they may have known their circumstances would change during 2012-2013 (e.g due to the birth of a second child) or they thought it might change.

This is because they believed their income to be over the £26,000 limit. If advisers come across claimants during 2016/17 who allowed their claim to lapse as a result of the letter and whose circumstances changed meaning they would have received payment for 2012-20-2104, they should submit a fresh claim as soon as possible and request the maximum 31 days backdating.

Although the process is often referred to as the ‘renewals process’, not everyone will want or need to renew their claim.

Some people, for example where a joint claim ended in the tax year just ended, will need to finalise the old claim but will not be making a new claim. The renewals process The claim for the year just ended (current year) was based initially on the claimant’s circumstances for that year, and income for the year before (the previous year).




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