Contact us


 01332 202660


















61 Friar Gate  Derby  DE1 1DJ


Registered to carry out audit work Association of Chartered Certified Accountants. under number 8011438

Member of the Association of Chartered Certified Accountants

01332 202660


What is an EORI number and who needs one?

Adrian Mooy - Monday, October 21, 2019


An economic operator registration and identification (EORI) number will be needed for UK businesses to be able to continue to trade with the EU after the UK leaves the EU.


If there is a no-deal Brexit


In the event that the UK leaves the EU without a deal, an EORI number that starts with GB will be needed to move goods in and out of the UK.


An EORI number is not needed if goods are only moved between Northern Ireland and Ireland. However, one is required for imports and exports that move directly between Ireland and Great Britain without going through Northern Ireland.


A business that already has an EORI number starting with GB can continue to use it. It will be 12 digits long and include the VAT number where the business is registered for VAT.


VAT-registered businesses


Where a business is registered for VAT, HMRC send out EORI numbers automatically. It is advisable to keep the letter and a separate note of the number.


Businesses not registered for VAT


Businesses that are not registered for VAT will not receive an EORI number automatically. They will therefore need to apply for one if they wish to continue to trade with the EU post-Brexit.


This is a simple process and can be done online on the website (see Applicants will usually receive the number immediately; although it may take up to five working days if HMRC need to undertake more checks.


Forgotten or misplaced EORI numbers


A business which has lost or misplaced its EORI number can contact the EORI helpline online using the contact form on the website at


EU EORI number


A business that wishes to trade with an EU country will also need an EU EORI number starting with the country code of the country that they wish to trade with. This should be obtained from the Customs authority of the EU country that the business will first trade with post Brexit.

Capital gains tax and chattels

Adrian Mooy - Wednesday, October 16, 2019
For capital gains tax purposes, not all chattels are equal. In some cases, it is possible to realise a profit on the disposal of a chattel and enjoy that profit tax free, whereas in other cases, capital gains tax must be paid. It all depends on whether the chattel is a wasting chattel or a non-wasting chattel, and where it falls in the latter camp, the amount of the disposal proceeds.
What is a chattel?


The word ‘chattel’ is a legal term that means an item of tangible movable property. This covers personal possessions, including items of household furniture, paintings and antiques, cars, motorcycles. Items of plant and machinery which are not fixed to a building are also chattels.


Exemption for cars


Private cars and other passenger vehicles are exempt from capital gains tax.


Wasting assets


A wasting asset is an asset with a predictable life of 50 years or less. Certain chattels are always treated as wasting assets, such as plant or machinery.
A gain or loss on a disposal of a wasting chattel is exempt from capital gains tax unless capital allowances have or could have been claimed on the asset. Capital gains tax also applies if a chattel with a predictable life of more than 50 years is loaned to a business which uses it as plant.


Non-wasting chattels


Chattels with a predictable life of more than 50 years are non-wasting chattels. This would include paintings and jewellery.


The capital gains tax position depends on the sale proceeds.


Chattels exemption – proceeds £6,000 or less


An exemption - the chattels exemptions – applies if a gain arises on the disposal of a chattel and the disposal proceeds do not exceed £6,000.


Example 1


Max purchases a painting from an unknown artist for £300. The artist becomes popular and Max sells the painting for £5,000, realising a gain of £4,700.


As the disposal proceeds are less than £6,000, the chattels exemption applies, and the gain is exempt from capital gains tax.


Chattels exemption – proceeds more than £6,000


Where the proceeds are more than £6,000, the gain is reduced by five-thirds of the difference between the amount of the consideration and £6,000.
Where the disposal proceeds are more than £15,000, the maximum gain will exceed the actual gain, so the relief is not in point.


Example 2


Ruby acquires an antique brooch for £3,000. It becomes a collectible item and she sells it for £10,000.


The maximum chargeable gain is 5/3 (£10,000 - £6,000) = £6,667


The actual gain is £7,000. As this exceeds the maximum permitted gain, the chargeable gain is £6,667.




In the same way that the exemption operates to reduce the chargeable gain, it also caps the allowable loss. If a loss arises and the consideration on disposal is less than £6,000, it is deemed to be £6,000 for the purposes of computing the loss.


Example 3


Lola buys a painting for £7,000 which turns out to be a fake. She is able to sell it for £100, realising an actual loss of £6,900.


However, in computing the allowable loss for capital gains tax purposes, the consideration is deemed to be £6,000. The allowable loss is therefore £1,000 (£6,000 - £7,000) rather than £6,900.


Sets of chattels


Special rules apply to sets of chattels. This is to prevent people from artificially splitting a set worth more than £6,000 and selling each item separately to the same person for less than £6,000 each to benefit from the chattels exemption. The anti-avoidance provisions work to treat the set as a single asset in respect of which only one £6,000 limit is allowed.


Calculating the Class 4 NIC liability

Adrian Mooy - Tuesday, October 15, 2019
The self-employed pay two classes of National Insurance contributions – Class 2 and Class 4.


Class 2 contributions are weekly flat rate contributions which provide the mechanism by which the self-employed build up their entitlement to the state pension and certain contributory benefits. By contrast, Class 4 contributions are based on profits from the self-employment and operate more like a tax in that they do not confer any benefit or pension entitlement.
Nature of Class 4 contributions


Class 4 National Insurance contributions are payable by self-employed earners aged 16 or over and below state pension age. The liability is triggered once profits from the self-employment reach the lower profits limit, set at £8,632 for 2019/20. This is aligned with the primary and secondary thresholds for Class 1 National Insurance purposes.


Class 4 contributions are payable at the main rate on profits between the lower profits limit and the upper profits limit and at the additional rate on profits in excess of the upper profits limit. For 2019/20, the upper profits limit is set at £50,000, aligning with both the upper earnings limit for Class 1 National Insurance purposes and the rate at which higher rate tax becomes payable.
The main Class 4 rate is set at 9% for 2019/20 and the additional Class 4 rate is set at 2%.


Example 1


John is self-employed as a personal trainer. In 2019/20 his profits from self-employment are £7,250.
As his profits are below the lower profits limit, he does not need to pay any Class 4 National Insurance contributions for 2019/20.
However, as his profits exceed the small profits limit of £6,365 for Class 2 National Insurance purposes, he must pay weekly Class 2 contributions of £3 per week.


Example 2


Jane is self-employed as an interior designer. In 2019/20 her profits from self-employment are £32,000.
She must pay Class 4 National Insurance contributions on her profits to the extent that they exceed the lower profits limit for 2019/20 of £8,632.
Her Class 4 National Insurance liability is as follows:
9% (£32,000 - £8,632) = £2,103.12
Jane must also pay Class 2 contributions of £3 per week.


Example 3


Jackie is a self-employed accountant. For 2019/20 her profits from self-employment are £77,000. She must pay Class 4 National Insurance contributions on her profits to the extent that they exceed the lower profits limit for 2019/20 of £8,632.
Her Class 4 National Insurance liability is as follows:
(9% (£50,000 - £8,632)) + (2% (£77,000 - £50,000)) = £4,263.12
Jackie must also pay Class 2 contributions of £3 per week.


Paying the Class 4 National Insurance liability


Class 4 National Insurance contributions are payable with tax under the self-assessment system. The liability must be paid by 31 January after the end of the tax year to which it relates – so Class 4 National Insurance contributions for 2019/20 must be paid by 31 January 2021.


Unlike Class 2 contributions, Class 4 contributions are taken into account in computing payments on account. Payments on account must be made where the previous year’s tax and Class 4 National Insurance liability was £1,000 or more unless at least 80% of the tax due for that year was collected at source. Each payment on account is 50% of the previous year’s liability. Payments on account must be made on 31 January in the tax year and on 31 January after the tax year, with any remaining liability (for example where current year’s bill is higher than the previous year’s) being paid by 31 January after the end of the tax year.


Worthless assets and negligible value claims

Adrian Mooy - Monday, October 14, 2019


Where an asset has been lost or destroyed or the value of the asset has become negligible, it may be possible to take advantage of an allowable loss for capital gains tax purposes. It should be noted, however, that the loss will only be an allowable loss if any gain on the disposal of the asset would have been a chargeable gain.


A distinction is drawn between assets that have ceased to exist and those that have become of negligible value.


Assets that have been lost or destroyed


The entire loss, destruction, dissipation or extinction of an asset is treated as a disposal or that asset, regardless of whether or not any compensation is received. The resulting loss is allowable for capital gains tax purposes. If any compensation is received, this is treated as proceeds from the disposal.


Negligible value claim


If the asset still exists but has become of negligible value, as long as one of two conditions – A or B – is met, a negligible value claim can be made by the owner of the asset.


The legislation does not define ‘negligible’ but HMRC take the view that it means that is worth ‘next to nothing’.


Condition A is that the asset has become of negligible value while still owned by the person.


Condition B is that:


 • the disposal by which the person acquired the asset was a no gain/no loss disposal (as is the case between spouses and civil partners)


 • at the time of that disposal, the asset was of negligible value


 • between the time when the asset became of negligible value and the disposal by which the person acquired it, any other disposal of the asset was on a no gain/no loss basis


Asset must still exist


For a negligible value claim to succeed, the asset must exist when the claim is made. If the asset has ceased to exist, for capital gains tax purposes there has been an actual disposal of the asset (as outlined above in relation to assets lost or destroyed).


No time limit


There is no time limit by which a negligible value claim must be made. However, the asset must be of negligible value at the date of the claim. The claimant must be able to demonstrate that the asset became of negligible value while owned by them (or where acquired from a spouse or civil partner in a no gain/no loss disposal, while owned by their spouse or civil partner). Evidence should be retained to support the claim.


Effect of a successful claim


A successful negligible claim gives rise to a deemed disposal of the asset, with the asset immediately being reacquired for the amount specified in the claim. The loss on the deemed disposal is an allowable loss, provided that any gain that had arisen on the disposal of the asset had been an allowable loss. It should be noted that the allowable loss arises from the deemed disposal rather than from the negligible value claim itself.
In certain circumstances where the claim relates to qualifying shares, the loss can be set against income.


Be aware of 60% tax rate risk on bonuses

Adrian Mooy - Friday, October 11, 2019
In the lead up to Christmas and the end of the financial year for many businesses, some directors and employees may be fortunate enough to be thinking of a bonus. If this is the case, it might be worth reviewing things beforehand to see if there is a risk of suffering effective tax rates of up to 60%, and if so, whether this can be avoided.


The risk of paying a high effective tax rate on a bonus stems from the abatement of the personal tax allowance where the individual’s ‘adjusted net income’ is equal to, or above, £100,000 for a particular tax year. The personal tax allowance for 2019/20 is £12,500, but this will be reduced by £1 for every £2 the taxpayer’s income is over that limit. The personal allowance may be reduced to nil from this income limit. Broadly, ‘adjusted net income’ is total taxable income before any personal allowances, less certain tax reliefs (including trading losses, Gift Aid donations, and pension contributions).


As a consequence of the personal allowance abatement rules, a taxpayer with income between £100,000 and approximately £119,000 will suffer marginal tax rates of up to 60% as the personal allowance is withdrawn.


Graham is an employee of a company from which he draws a salary of £100,000 per annum He has no other sources of income. In December 2019 he will be paid a bonus of £7,000. He is entitled to a personal tax allowance of £12,500 in 2019/20, but he loses £3,500 of it (£1 for every £2 earned over £100,000 ((£107,000 – £100,000) /2)), leaving him with an allowance of £9,000. He will pay tax of £2,800 (£7,000 × 40%) on the bonus, plus an extra £1,400 due to lost allowances (£3,500 × 40%). His total tax attributable to the bonus is therefore £4,200. Graham will therefore pay tax on the bonus at an effective rate of 60% (£4,200/£7,000 x 100).


Hannah on the other hand, receives an annual salary of £125,000 from employment. She also has no other sources of income. Hannah is also expecting to receive a bonus of £7,000 in December 2019. She is entitled to a personal tax allowance of £12,500 in 2019-20, but she loses entitlement to all of it because her basic salary exceeds the point at which the allowance is fully withdrawn (£125,000). Receiving the bonus, therefore, results in no further adjustment to her personal allowance. She will simply pay tax of £2,800 (£7,000 × 40%) on the bonus, which means that her effective tax rate on that part of his income is only 40%.
So, what action can be taken to minimise exposure to these marginal rates?
Taxpayers with income slightly exceeding the £100,000 ceiling may avoid losing some or all of their personal allowance by taking steps to reduce ‘adjusted net income’ to below the abatement threshold. Options worth considering may include:
 • Increasing pension contributions - for example, a taxpayer with income of £105,000 might consider making a pension contribution of £5,000. They will get 40% tax relief on the contribution, and the full personal allowance will be reinstated.
 • Making donations to charity under the Gift Aid scheme. For the charity, the donation is assumed to be made net of basic rate tax, which the charity claims back from HMRC. For the taxpayer, their basic rate tax band is increased by the value of the gross donation, which in turn reduces the amount of income to be taxed at the higher rate.


 • Consider transferring income-producing assets to a lower-earning spouse or partner.


As with all tax planning opportunities, the wider picture should be considered before taking any action. In particular, the benefits of any tax saving need to outweigh the cost and administrative inconvenience of the transaction.


When and how to incorporate

Adrian Mooy - Wednesday, October 09, 2019
Over the last decade, corporation tax rates for most companies – irrespective of size - have fluctuated between 19% and 21%. The main rate of corporation tax is expected to be cut to 17% from April 2020.


Current corporation tax rates are still pretty favourable and are indeed generally lower than those paid by many individuals. In addition, there are other areas where company formation may help save tax. Although the costs and regulations involved with running a company are usually greater than trading as a sole trader or in partnership, and more administration is generally needed, using a company as a vehicle through which to trade remains a popular choice.


The starting point for dealing with companies and company directors is to remember that a limited company exists in its own right, which means that the company’s finances are separate from the personal finances of the company owners. Strict laws mean that the shareholders cannot simply take money out of the company whenever they feel like it.
When to incorporate
The question of whether to incorporate commonly arises as a business expands – the limited liability status that company formation provides is often needed to start winning contracts with bigger companies. However, incorporating may not be such a good deal in the early days of trade, or if there is no intention to grow beyond the status of a solely owned business. This may be particularly relevant if losses are envisaged in the early years of trading – for sole traders and partnerships, it is possible to carry back losses made in the first four years and offset them, where applicable, against personal income of the three preceding years. This often results in a substantial refund of tax becoming due and may offer a much-needed cash boost to the business.
How to incorporate
Firstly, the company must choose a name, which cannot be the same as another registered company’s name. If it is too similar to another company’s name or trademark it may have to be changed.


The company must have at least one director who is a natural person, and a public company must have at least two directors. A private company need not appoint a company secretary, although in practice many choose to do so.
There must be at least one shareholder or guarantor, who can also be a director.


The company will need to prepare a 'memorandum of association' and 'articles of association', as provided for by Companies Act 2006. Broadly, these documents set out how the company will be run.


Private limited companies are also required to maintain a register of those persons who have significant control of the company – known as a ‘PSC Register’. The function of the Register is to increase corporate transparency for the purpose of combating tax evasion, money laundering and terrorist financing.


The company must register with HMRC for corporation tax and PAYE as an employer at the same time as registering with Companies House. This must be done within three months of starting to do business. The company may also be required to register for VAT if it meets the registration criteria.


Although there are disadvantages to incorporating a business, the lower tax rates and other reliefs currently on offer still make it an attractive proposition. Some advantages worth considering include:


 • ability to pay dividends to shareholders, which may in turn reduce liability to National Insurance Contributions (NICs)


 • flexible succession planning, particularly for inheritance tax purposes


 • great investment opportunities, for example potential to raise money through tax-efficient schemes such as the Enterprise Investment Scheme (EIS)


 • limited liability status for shareholders, although directors may be asked to give personal guarantees of loans to the company and may still be held liable for the debts of a company


 • potential increased saleability


Business owners are recommended to evaluate the advantages of incorporation on an on-going basis.


VAT refunds for DIY builders

Adrian Mooy - Friday, October 04, 2019


If you build your own house or convert an existing property into a home, you may be eligible to apply for a VAT refund on building materials and services. You do not need to be VAT registered to claim a refund.


What qualifies?


Refunds can be claimed in respect of building materials that are incorporated into the building and which cannot be removed without tools or without damaging the building. Refunds are available for materials used to build both new homes and for certain conversions.


A new home will qualify if it is separate and self-contained and you build it for you and your family to live in. The property must not be used for business purposes, although you are permitted to use one room as a home office. Conversions will qualify if the property was previously used for non-residential purposes and is converted for residential use.


Conversions of residential building will only qualify if they have not been lived in for at least 10 years.


Where you use a builder, the builder’s services will normally be zero-rated where they work on a new home. However, you can claim a refund for VAT charged by a builder working on a conversion.


What does not qualify?


Refunds are not available in respect of:


 • materials or services on which no VAT is payable because they are zero-rated or exempt;


 • professional fees, such as architects’ fees or surveyors’ fees;


 • costs of hiring machinery or equipment;


 • building materials which are not permanently attached to or part of the building;


 • fitted furniture, some gas and electrical appliances, carpets and garden ornaments.


A refund is also denied if the building is not capable of being sold separately, for example, as a result of planning restrictions.


How to claim


The claim is made on form 431NB where it relates to a new build and on form 431 where it relates to a conversion. The forms are available on the website. The claim must be made within three months of the date on which the building work was completed.


You must include all the relevant supporting documentation with your claim, such as valid VAT invoices to support the amount claimed. The refund will normally be issued within 30 days of making the claim.


Partner note:

Curtailment of letting relief

Adrian Mooy - Thursday, October 03, 2019
Landlords have been hit with a number of tax hikes in recent years, and this trend shows no signs of abating. From 6 April 2020, lettings relief – a valuable capital gains tax relief which is available where a property which has at some point been the owner’s only or main residence is let out – is seriously curtailed.




Under the current rules letting relief applies to shelter part of the gain arising on the sale of a property which has been let out as residential accommodation and which at some time was the owner’s only or main residence. The amount of the letting relief is the lowest of the following three amounts:
 • the amount of private residence relief available on the disposal;
 • £40,000; and


 • the gain attributable to the letting.


Under the current rules, periods of residential letting count regardless of whether or not the landlord also lives in the property.


From 6 April 2020


From 6 April 2020, letting relief will only be available where the owner of the property shares occupancy with a tenant. From that date, lettings relief is available where at some point the owner of the property lets out part of their main residence as residential accommodation and shares occupation of that residence with an individual who has no interest in the residence.
To the extent that a gain that would otherwise be chargeable to capital gains tax because it relates to the part of the main residence which is let out as residential accommodation, the availability of lettings relief means that it is only chargeable to capital gains tax to the extent that it exceeds the lower of:
 • the amount of the gain sheltered by private residence relief; and


 • £40,000.


Example 1


Tom owns a property which he lives in as his main residence. He lived in it for a year on his own, then to help pay the bills he let out 40% as residential accommodation.


In June 2020 he sells the property realising a gain of £189,000. He had owned the property for five years and three months (63 months).
The final nine months of ownership are covered by the final period exemption – this equates to £27,000.


For the remaining 54 months, private residence relief is available for the first 12 months and 40% of the remaining 48 months – a total of 31.2 months (12 + (40% x 48)). This is worth £93,600. (31.2/63 x £189,000).


Private residence relief in total is worth £120,600 (£27,000 + £93,600).


The gain attributable to the letting is £68,400 (£189,000 - £120,600). This is taxable to the extent that is exceeds £40,000 (being the lower of £40,000 and £120,600).


Thus the letting relief is worth £40,000 and the chargeable gain is £28,400.


Example 2


Lucy buys a flat for £300,000 which she lives in for one year as her main residence. She then buys a new home which she lives in as her main residence and lets the flat out for three years, before selling it and realising a gain of £96,000.


If she sells it before 6 April 2020, she will be entitled to private residence relief of £60,000 (30/48 x £96,000). The final 18 months are exempt as she lived in the flat for 12 months as her main residence. The gain attributable to letting is £36,000, all of which is sheltered by lettings relief (as less than both private residence relief and £40,000).


If she sells the property after 6 April 2020, the final period exemption only covers the last nine months, reducing the private residence relief to £42,000 (21/48 x £96,000). The remainder of the gain of £54,000, which is attributable to the letting, is chargeable to capital gains tax as letting relief is no longer available as Lucy does not share her home with the tenant.


Consider realising a gain on a let property which has also been a main residence prior to 6 April 2020 to take advantage of the letting relief available prior to that date where a landlord does not share the accommodation with the tenant.


Private residence relief and the final period exemption

Adrian Mooy - Wednesday, October 02, 2019
From a capital gains tax perspective, there are significant tax savings to be had if a property has been the owner’s only or main residence. The main gains are where the property has been the only or main residence throughout the whole period of ownership as private residence relief applies in full to shelter any gain arising on the disposal of the property from capital gains tax.


However, there are also advantages if a property enjoys only or main residence status for part of the ownership period; not only are any gains relating to that period sheltered from capital gains tax, but those covered by the final period exemption are also tax-free.


The final period exemption works to shelter any gain arising in the final period of ownership from capital gains tax if the property has at any time, however briefly, been the owner’s only or main residence. This can be particularly useful if the property is, say, lived in as a main home and then let out prior to being sold, or where a person has two or more residences.


Prior to 6 April 2020, the final period exemption applies generally to the last 18 months of ownership. Where the person making the disposal is a disabled person or a long-term resident in a care home, the final period exemption applies to the last 36 months of ownership.


From 6 April 2020, the final period exemption is reduced to nine months, although it will remain at 36 months for care home residents and disabled persons.


Planning ahead


Where a property which has been occupied as a main residence at some point, it could be very advantageous to dispose of it prior to 6 April 2020 rather than after that date to benefit from the longer final period exemption.




Frankie has a cottage on the coast that he brought on 1 January 2010 for £200,000. He lived in it as his main residence for two years until 31 December 2011, when he purchased a city flat which has been his main residence since that date. He continues to use the cottage as a holiday home.
He plans to sell the cottage and expects to get £320,000.
Scenario 1 – sale on 31 March 2020
If Frankie sells the cottage on 31 March 2020, he will have owned the cottage for a total of 10 years and three months (123 months). Of that period, he lived in it for 24 months as his only or main residence. As the sale takes place prior to 6 April 2020, he will benefit from the final period exemption for the last 18 months.
The gain on sale is £120,000 (£320,000 - £200,000)
He qualifies for 42 months’ private residence relief, which is worth £40,976 (42/123 x £120,000).
The chargeable gain is therefore £79,024 (£120,000 - £40,976).
Scenario 2 – sale on 30 April 2020
If Frankie does not sell the property until 30 April 2020, he will only benefit from a nine-month final period exemption. If he sells on this date, he will have owned the property for 124 months. Assuming the sale price remains at £320,000 and the gain at £120,000, the gain which is sheltered by private residence relief is £31,935 (33/124 x £120,000), and the chargeable gain is increased to £88,065 (£120,000 - £31,935).
If planning to dispose of a property which has been an only or main residence for some but not all of the period of ownership, selling prior to 6 April 2020 will enable the owner to shelter the gain pertaining to the last 18 months of ownership.


Tax credits – do I have to tell HMRC if my circumstances change?

Adrian Mooy - Tuesday, October 01, 2019
Tax credits are benefit payments that are paid to people in work who are on a low income or have children.
There are two tax credits – working tax credit (for those working but on a low income) and child tax credit (for those on low income, regardless of whether they are working or not, with children). Existing tax credit claimants need to renew them each year.


New claimants must claim Universal Credit rather than Working or Child Tax Credits; eventually, existing tax credit claimants will be moved over to Universal Credit. This is due to happen between November 2020 and December 2023.


Tax credits can go up or down as a result of changes in family or work circumstances.


Changes in that must be reported to HMRC


A tax credit claimant must report any of the following changes in circumstance to HMRC.


1. Living circumstances change, for example if a partner moves out, or you start to live with a new partner, you get married or form a civil partnership, or you separate permanently, or you divorce.
2. Your partner or child dies.
3. A child leaves home or is taken into care.
4. A child is taken into custody.
5. A child over the age of 16 leaves approved education or training or a careers service.
6. Childcare costs go down by more than £10 per week, or you start receiving help with childcare costs.
7. If you are in a couple, your combined working hours fall to below 30 hours per week.
8. Working hours fall below the minimum needed for working tax credit, which depend on circumstances.


It is necessary to make a new claim if a relationship ends or you start a new relationship, or if your partner dies.


You must also tell HMRC if any of the following occur.


1. You go abroad for eight weeks or more.
2. You leave the UK permanently or lose your right to reside in the UK.
3. You reduce your working hours to less than 16 hours per week while claiming childcare costs.
4. You have been on strike for more than 10 consecutive days.


Changes in income, benefits and working hours


If tax credits are overpaid, the overpayment will need to be returned to HMRC. To avoid building up an overpayment which will have to be paid back, HMRC should be notified if any of the following occur.


1. A change in income (if increases or decreases by £2,500 HMRC should be notified immediately so that tax credit payments can be adjusted)
2. Combined working hours for a couple who have children are increased to 30 hours a week or more.
3. You have a baby or take on responsibility for another child.
4. You start or stop claiming benefits or your benefits change.
5. You start or stop getting a disability payment.
6. Your child is certified blind (or is no longer blind).
7. You start paying for registered or approved childcare.
8. You stop getting help with childcare.


The above changes must be reported to HMRC within one month of the date on which they occur.
Changes can be notified online at