Updated: August 2025
From 5 April 2025, the UK government permanently closed new applications for tax credits. This marks a major shift in the welfare system, as all new claims for financial support are now processed through Universal Credit instead.
If you already receive tax credits, you can continue to receive them until you are moved over to Universal Credit under HMRC’s managed migration programme, which is scheduled to finish by the end of 2026.
This guide explains the 2025–26 tax credit changes, how they compare to Universal Credit, important deadlines, and what to do if you face overpayments or appeals.
What are Tax Credits?
Earlier before April 2025, tax credits were the payments provided by the government to support working individuals and families on low to moderate incomes.
They were of two main types:
- Working Tax Credit: It was for those people who met minimum hours and income limits.
- Child Tax Credit: It was for those responsible for children, regardless of work status.
Tax credits end on 5 April 2025. Financial support for new applicants is through Universal Credit, which combines tax credits and other benefits in one monthly payment.
This marks the completion of the government’s welfare reform programme.
Key points now:
- Eligibility for existing claims is still based on hours worked, income, and childcare costs.
- Payments continue to be made monthly or every four weeks.
- You cannot claim both tax credits and Universal Credit at the same time.
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How do I apply for Universal Credit if I need support now?
As new tax credit applications are closed, if anyone requires financial help they should apply for Universal Credit instead.
This benefit will replace both Working Tax Credit and Child Tax Credit for new claimants.
To apply for Universal Credit:
- Visit the GOV.UK Universal Credit application page.
- Create an online account and provide household, income, and housing details.
- Book and attend an interview at Jobcentre Plus.
- Provide identification and proof, such as payslips, business accounts (if self‑employed) or tenancy agreements.
- Keep your details updated to avoid overpayment of tax credits or Universal Credit.
The processing takes around five weeks, which includes one month’s assessment and up to a week for payment. In urgent cases, an advance can be requested.
What are the changes in the 2025–26 Tax Credits System?
The 2025–26 changes to tax credits include:
- Closure of new claims from April 2025.
- Ongoing managed migration moving all claimants to Universal Credit by 2026.
- Stricter income reporting rules to reduce overpayments.
- Faster digital renewal options via GOV.UK.
These changes are part of efforts to simplify and modernise the welfare system.
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How do payment dates and renewals work for Tax Credits?
Usually, the tax credit payment dates are monthly, though some receive payments every four weeks. This schedule is confirmed by HMRC in your award notice and online account.
Renewals begin from April to 31 July each year. If you miss the renewal deadline, your payments will stop and you may have to repay recent amounts received.
You will be able to forecast payments before renewals if you are using the tax credits calculator. If you face any issues, call the HMRC helpline for tax credits (0345 300 3900).
What happens if I’m overpaid and how can I appeal?
The scenario of overpayment of tax credits often arises when there is a change in income or working hours, but you don’t inform HMRC promptly.
Steps to follow if overpaid:
- Notify HMRC immediately.
- Set up a repayment plan if needed.
- Keep all change reports and relevant documents.
If you disagree with HMRC’s decision, start the tax credits appeal process with a mandatory reconsideration within 30 days and submit supporting evidence like payslips or childcare receipts.
How are Tax Credits different from Universal Credit in 2025–26?
| Feature / Criteria | Tax Credits (Existing Claimants) | Universal Credit (New & Migrated Claimants) |
|---|---|---|
| Application status | Closed since 5 April 2025 | Open to all eligible claimants |
| Benefits covered | Working Tax Credit & Child Tax Credit | Combines tax credits + other benefits in one payment |
| Payment frequency | Monthly or four-weekly | Monthly |
| Eligibility basis | Hours worked, income, childcare costs | Household income, savings, and circumstances |
| Self-employed support | Based on annual profits and proof | Assessed monthly, integrated with benefits |
| Multiple claims | Cannot claim UC at the same time | N/A |
| Transition | Managed migration until end of 2026 | Default benefits system |
Conclusion
In 2025–26, tax credits remain in place only for existing claimants, while all new applications now go through Universal Credit.
If you still receive tax credits, it’s vital to renew on time, track your tax credit payment dates and report any changes to HMRC to avoid overpayments.
Understanding the tax credit changes 2025 in the UK, knowing how the migration process works and using tools like the tax credits calculator can help you prepare for a smooth transition.
Staying informed ensures you continue to receive the right support for your circumstances both now and in the future as the benefits system evolves.
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FAQ
Can I still apply for tax credits?
No. New claims closed on 5 April 2025. If you need financial support, you must apply for Universal Credit.
Do I need to switch if I’m on tax credits?
Yes. HMRC will move you to Universal Credit between 2025 and 2026 under managed migration.
How do I find my tax credit payment dates?
Check your award notice or log in to your HMRC online account.
What happens if I’m overpaid tax credits?
Report it to HMRC immediately to arrange repayment and avoid further deductions.
Can I claim both tax credits and Universal Credit?
No. You can only receive one benefit at a time.
Need Help Navigating Your Benefits Transition?
The shift from tax credits to Universal Credit can be tricky, especially with the new 2025–26 changes. Our experts are here to guide you through eligibility checks, paperwork, and HMRC deadlines to ensure you get the support you deserve.
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Parul is a dedicated writer and expert in the accounting industry, known for her insightful and well researched content. Her writing covers a wide range of topics, including tax regulations, financial reporting standards, and best practices for compliance. She is committed to producing content that not only informs but also empowers readers to make informed decisions.