Millions of people across the UK have been receiving cost of living cash payments since Tuesday last week, and now one million households claiming Tax Credits from HMRC will also start to receive their first £301 payment from today.
This payment is designed to deliver vital financial help to eligible tax credit customers across the country, and further support will be paid in autumn 2023 and spring 2024 to those entitled to payment.
Rising debt continues to be an issue for millions of Britons, especially following the increase in house prices, energy prices and general living costs which some say has been brought about through the pandemic.
With the pandemic ‘hangover’ in full gear, other households have found real difficulties in getting access to affordable credit, with even stricter criteria from banks and lenders and a major cracking down on high street lenders by the Financial Conduct Authority which means that finding loans from personal, guarantor or payday lenders are very far and few between.
The cost of living payment is aimed at people who claim either Child Tax Credits or Working Tax Credits from HMRC. To be eligible for the £301 cash, you must have received a payment of Tax Credits in the qualifying period between January 26, 2023, and February 25, 2023, or must have later been found eligible for a payment. The £301 payment is the first of three cost of living payments totaling £900, which will be paid over the next 12 months.
Unlike the DWP’s cost of living payment, which is rolled out by the Department for Work and Pensions, the HMRC payment is to be made by HMRC to avoid double payments being made. According to DWP, Tax Credit claimants get their £301 payment after those on DWP benefits to ensure that double payments are avoided.
If you are eligible for the payment, HMRC will pay you automatically, and you don’t need to take any action to receive the money. The next two payments, worth £299 and £300, will be made in the Autumn and in the Spring of next year. However, the dates for the second and third payments have not yet been announced.
People claiming Working Tax Credits or Child Tax Credits will start to receive their first £301 payment from Tuesday, May 2. These payments will continue to be made to claimants until May 9, 2023. It’s worth noting that not everyone will receive the money on the first day, as there is no structure on how HMRC will distribute the money, such as alphabetically or by address. Therefore, you will need to be patient and wait until the payment arrives.
If you have a Monzo account, the bank will notify you when a payment is about to come into your account, but other banks might not. Just like the DWP’s cost of living payment, you can look out for a reference code on your online banking to check when you have been paid. For HMRC, the payment will be made with the reference code “HMRC COLS”. For joint claimants, where one claimant receives Working Tax Credit and the other claimant receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit.
If you believe you are eligible for the £301 payment but do not receive it during the payment window, you should wait until after May 17 to contact HMRC. This is to allow time for your bank, building society, or credit union to process the payment. However, if you claim both Tax Credits and a DWP benefit, then you will have your cost of living payment paid by the DWP, and you may have to wait until May 17 to receive your cash. In this case, you will also have to wait until after this date to contact the DWP or HMRC about your payment if you haven’t received it.
