Barbara Keeley MP


Barbara urges Salford families to check after HMRC sends out “misleading” letters about loss of tax credits

Tax Credits update imageFrom 6th April 2012, the rules for working tax credits for couples with children are changing.  Couples will have to work 24 hours rather than 16 hours or they will lose their whole entitlement to working tax credit, worth £3,870 a year. Under Labour, couples had to work 16 hours to qualify for working tax credits. Around 500 families in Salford could be affected by the loss of the working tax credits.

Letters were sent out by HMRC to advise couples about the tax changes but the letters have been branded “misleading” by the charity, Low Incomes Tax Reform Group. The letters deal a blow to hard -working families and have been described as “misleading” because they could prevent some parents from claiming tax credits.

One letter fails to mention that a couple where one person is a full-time carer can work for 16 hours a week and still receive working tax credit. This is a recent exemption granted for families with a full-time carer. The other letter was unclear about the income limits for paying tax credit, as families with more than one child, a disabled child or those who pay for childcare will have higher limits.

Unless those couples who are eligible for exemption contact HMRC by 6th April, their credit will stop and this would mean a loss of as much as £3,780 a year in tax credits.

Barbara said:

“At a time when working families are having to deal with higher costs of living and cuts to support services, this loss of tax credits could hit them very hard. With high unemployment I know it is hard for working people to find extra hours of work.  I am also very concerned that couples where one person receives Carers Allowance will not realise that they are exempt from this change in the rules for tax credits.

People who are uncertain about their tax credit status, especially families with carers, should contact HMRC urgently via the tax credit telephone advice line on 0345 300 3900.”

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