Consumer Rights: Last call to renew your tax credits ahead of Wednesday's deadline

If the taxman doesn't receive the form on time, you may end up losing out on benefits, repaying cash – and could even face paying a penalty

If you get working tax credit or child tax credit, don't ignore that renewal pack any longer. If your claim has to be renewed, post it today. HMRC has been sending out renewal forms in stages and everyone should have one by now. For most claimants the form has to be back by Wednesday. If you need to renew but don't do so by 31 July, your payments could stop, you may have to repay all the tax credits you've received so far this tax year, and you might even find yourself with a penalty.

The tax credit office uses the renewal forms to check that it has the right information about you and whether anything has changed that could affect the amount you're entitled to. The form is also important from your point of view because the office uses it to make sure that you get the right amount for the coming tax year and were paid the correct amount for the past tax year. If you are paid more tax credits than you're entitled to, you will usually have to pay the money back.

If you claimed tax credits in the last tax year – even if you didn't get them because your income was too high to qualify, or you only got them for part of the year – you should have a renewal pack. Some packs will have just an Annual Review notice (TC603R). You'll get the notice on its own if you get only the family element of child tax credit, if you claimed tax credits but didn't get them because your income was too high, or you got income support, income-based jobseeker's allowance, income-based employment and support allowance or pension credit for the whole of the last tax year. If your pack has only the Annual Review Notice, your claim will be renewed automatically, but you should check that all the information on it is correct. However, your pack may have an Annual Review Notice plus an Annual Declaration form (TC603D or TC603D2). The Annual Declaration form is the one that has to be sent back to renew your claim. You cannot renew until you have received your renewal pack and you cannot renew online.

Send the completed Annual Declaration form (TC603D or TC603D2) to the Tax Credit Office in the reply envelope provided, or call the Tax Credit Helpline if you want to avoid being late with the renewal. If you do renew over the phone, keep a written note of everything you are told. If you are a couple and have made a joint claim, you need to give details of both your incomes and circumstances.

If you haven't received your renewal pack, contact the Tax Credit Helpline on 0345 300 3900 for the forms. You will then have 30 days to renew or report a change in circumstances. Your payments will carry on in the meantime, but if they are based on out-of-date information you may not get the correct amount.

Even if you don't have to renew your claim you do still need to tell the Tax Credit Office straightaway if your circumstances change, your income is different from what is shown on the Annual Review notice, or there are any mistakes or details missing on the forms. Don't forget to tell the office about changes or you could face a big bill for overpayments or miss out on money you are entitled to.

It usually takes up to eight weeks to deal with your renewal. The Tax Credit Office will then send you an award notice with a final decision for the last tax year and a separate award notice showing what your payments will be for the new tax year, including any overpayments or underpayments. The Tax Credit Office may write to you to check that you have renewed correctly and may ask you for evidence, for example, of your income. So keep any relevant paperwork safe. If you don't get your award notice within eight weeks, contact the Tax Credit Helpline.

A few words of warning from Jane Moore, technical manager at ICAEW (the Institute of Chartered Accountants in England and Wales), who says: "If you have a high income, watch out that HMRC may have decided to take you out of the tax credits system unless you tell them specifically that you want to stay in. If you don't have final income figures for 2012/13 [for example, you may be self-employed and not have your final accounts yet], you must still do something by 31 July.

"You can fill in the Declaration form with estimated figures and send it back. Your claim will be renewed and your payments will continue, though you should send in final figures by 31 January 2014."

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Q: I bought a new suite of furniture at the end of last year. At the time my old one was falling apart and I was working, so the shop arranged a loan for me. But now I'm out of work, I'm struggling to pay the rent and the bills and can't keep up the repayments on the loan. The finance company says it is going to take away the suite while the shop says that it is nothing to do with it. I know now that I should never have signed the finance agreement. I've learnt my lesson but I don't know how to get the finance company off my back. I've got rid of my credit cards and don't want to borrow from anywhere else. I could probably only get a loan from some kind of loan shark anyway, but I still need something to sit on. Can you suggest anything that I can do?

TP, Glasgow

A: If you are in breach of a credit agreement – as in your case because you're behind with your repayments – the first thing to do is check the type of agreement and the details of the circumstances in which, how and when the creditor is entitled to end the agreement. With most agreements they have to send you a default notice setting out what the breach is, how you can stop further action being taken, what will happen if you don't and the time limits. If you can't come up with the money, the creditor may be entitled to terminate the agreement, demand early payment of the money you owe, or repossess goods. Usually, the lender will need a court order to repossess unless you've paid less than one third of the total amount. Keep paying your rent and bills and try negotiating smaller loan repayments you can afford. If that fails or you simply can't pay anything and the lender goes ahead and repossesses, with or without a court order, they will sell the suite at auction where prices are unlikely to cover the total owed. You will have to pay the shortfall plus any court costs. In that case your only option is to ask if you can try to sell the suite yourself as you may get more for it. You could pre-empt any further action by ending the agreement yourself and giving the suite back (check exactly how much you will have to pay if you do this). You could then trawl the recycling sites, where people offer goods for free, for a replacement.

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