Changes in income and tax credits

If your income goes down during the year tell the Tax Credit Office - you may get more tax credits. You can phone or write, but you can't tell them online. Also report if your income goes up. It might not change your tax credits for this tax year - but could stop you getting too much next year.

On this page:

How changes in income affect your tax credits

If your income in the current tax year is different from the previous year, the amount of tax credits you get may change. If your income changes in any of the following ways, then you need to tell the Tax Credit Office about it. A tax year runs from 6 April one year to 5 April the next.

If your income goes down in the current tax year by £2,500 or less

If all your other circumstances stay the same, your payments won't change for the current tax year. But it's still a good idea to tell the Tax Credit Office when you know your income will be lower. This is because they will use your new income figure to work out what to pay you for the following year.

If your income goes down in the current tax year by more than £2,500

Your tax credits payments may go up.

If your income goes up in the current tax year by £5,000 or less

This might not make any difference to the amount of tax credits you receive for the current year.

But it's best to tell the Tax Credit Office straight away when you know your income will be higher. If you don't, you may be paid too much (called an 'overpayment') when they work out what to pay you for the following year.

If your income goes up in the current tax year by more than £5,000

Your tax credits payments may go down.

Find out how to work out your income for your tax credits claim

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When to tell the Tax Credit Office about a change in income

If your income...

When to tell the Tax Credit Office

Why you need to tell the Tax Credit Office

Goes down by £2,500 or less.

As quickly as possible.

You may not get enough in tax credits the following year.

Goes down by more than £2,500.

As quickly as possible.

Your tax credits payments may go up.

Goes up by £5,000 or less.

As quickly as possible.

You may get too much in tax credits the following year (an overpayment).

Goes up by more than £5,000.

Straight away.

Your tax credits payments may go down, and you could be building up an overpayment which you may have to pay back.

Any decrease in your payments will be backdated to the date your income changed.

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What happens if you don't report a change in income?

If you don't tell the Tax Credit Office when your income goes down by more than £2,500, you might not get all the tax credits you are entitled to.

If your income goes up by £5,000 or less, your tax credits will not change until the following tax year. But this is as long as all your other circumstances stay the same. It's best to give the Tax Credit Office your new income figure straight away. This means they'll have it to work out how much they should pay you for the following year. It could save you building up an overpayment that you have to pay back.

If your income goes up by more than £5,000 and you don't report this, you may get too much in tax credits the following year (an overpayment). You will have to pay back what you shouldn't have had.

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How to report changes

You can report changes by calling the Tax Credit Helpline or writing to the Tax Credit Office.

You can't email or report changes online for tax credits.

Contact details for the Tax Credit Helpline and Office

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More useful links

Tax credits: changes you need to report and when

Protect your right to tax credits by claiming early

Tax credits information if you're coming off benefits

How your tax credits entitlement is worked out

Find out how to repay a tax credits overpayment

Leaving tax credits

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