Increases to working tax credits – introduced to help out those suffering financial issues as a result of the COVID-19 pandemic – will come to an end on April 23rd, as the Treasury trades them for a one off payment.
The financial aid initiative, introduced last year by Chancellor Rishi Sunak, saw payments increased by £1,045 to £3,040 from 6 April 2020 until 5 April 2021.
James Andrews, personal finance expert at money.co.uk, said: “The Government’s plan to increase working tax credit for households facing financial hardship during the coronavirus pandemic was welcomed by UK families last year. However, the increased payments have now been scrapped, in favour of a one-off £500 payment on April 23.
“This pay-out, combined with the extension of the Universal Credit uplift announced earlier in the year, are expected to cost the government a total of £3 billion.
“If you’re eligible for the payment, you don’t need to do anything as HMRC will contact you by text or a letter this month with details. However, if your bank details have changed in the last year you must inform HMRC to ensure you are properly paid. This can be done via phone, web chat or online here.
“Given the numerous changes announced in this year’s spring Budget, it’s important to keep up to date with the latest tax and benefit changes, otherwise you may find yourself missing out on payments you’re perfectly entitled to.
For a full list of tax claims, Universal Credit information and benefit guides visit: https://www.money.co.uk/guides/tax-and-benefits.htm