Tax Credit renewal packs are sent out to claimants every year to confirm continuing eligibility for the HMRC benefit.

Claimants should expect to start receiving their annual pack from tomorrow (May 2), but with a strict deadline to check and/or return their applications by July 31, HMRC is warning Britons to be wary of potential fraudsters.

A statement from the tax authority reads: “Criminals use deadlines, like the one for Tax Credits renewals, to trick people who might be expecting to hear from HMRC into sharing their banking or other personal details.”

It continued: “If a phone call, text or email is unexpected, do not give out private information or reply, and do not download attachments or click on links.

“It is ok to reject, refuse or ignore any requests - only criminals will try to rush or panic people. HMRC is also warning people not to share their login details with anyone else.”

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Up to 1.5 million Tax Credit renewal packs are due to be issued, and more than 500,000 customers will need to reply to HMRC by the deadline to confirm their circumstances for the 2023 to 2024 tax year. If they fail to do so, they could risk having their payments stopped.

There will be two types of renewal packs sent out, and it’s important to know the difference in order to know how exactly to respond. It could also help people decipher what could be a scam.

If someone receives a pack with a red line across the first page that says “reply now”, they will need to confirm their circumstances to renew their Tax Credits.

But if it receives a pack with a black line across the first page that says “check now”, customers just will need to check that their details are correct. If they are, HMRC says people do not need to do anything and their Tax Credits will be automatically renewed.

Eligible Tax Credit claimants will also start receiving the first £301 instalment of the cost of living payment tomorrow, but once again, Britons are being warned of the potential scam target this creates.

A statement from the Department of Work and Pensions (DWP) reads: “You do not need to apply. If you’re eligible, you’ll be paid automatically in the same way you usually get your benefit or Tax Credits. This includes if you’re found to be eligible at a later date.

“If you have had a message asking you to apply or contact someone about the payment, this might be a scam.”

Who is eligible for the Tax Credit cost of living payment?

To be eligible, people must have received a payment of Tax Credits for any day in the period between January 26, 2023, to February 25, 2023. People can also be eligible if they are later found to have been entitled to payment during this period.

Those getting both Child Tax Credit and Working Tax Credit will receive a cost of living payment for the Child Tax Credit only, paid by HMRC.

It should also be noted that those who get both Tax Credits from HMRC and a low-income benefit from DWP will not get a cost of living payment from both HMRC and the DWP - it will usually be paid by the DWP only.

The following two cost of living payments will be worth £300 and £299, and these will be distributed to most people in autumn 2023 and spring 2024, respectively. Details about eligibility periods for these payments will be released closer to the time.