Summary of changes to tax credits

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Reviewed September 2006

From November 2006:

There will be automatic limits (set at the same levels at which overpayments from a previous tax year are currently recovered) set for the recovery of in-year overpayments.
Ceasing to work at least 16 or 30 hours a week; ceasing to be responsible for a child or young person; and a child or young person ceasing to qualify for support become changes that must be reported to the tax credit office within three months.

From early 2007:

Towards the end of the tax year, HMRC will contact key groups of claimants to obtain more up-to-date income information on which to base provisional payments that are made until the renewal process is completed.

From April 2007:

When claimants report a fall in expected income during the year, their tax credit payments will be adjusted for the rest of the year to reflect their new income level, but will no longer include a one-off payment for the earlier part of the year - at the end of the year, their award will be finalised when their actual income is known, and if they have been underpaid, a further payment will then be made.
Changes that reduce entitlement much be reported to HMRC within one month (before this date, the time limit is three months).

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