Self-employed workers who also claim tax credits should get details about their profits for the year 2009/10 to HM Revenue and Customs (HMRC) as soon as possible.
Letters are due to go out in the next few days reminding self-employed claimants to inform HMRC about their final income for the previous year once they know the figures.
When they renew their claims, the self-employed can give HMRC an estimate of their income. But where an estimate has been provided, they have until 31 January to inform HMRC of the actual figure.
Failure to tell HMRC promptly of any changes in their income can result in an overpayment, which means claimants will have to pay back some of the money they’ve received.
David Gauke, the Exchequer Secretary to the Treasury, said: “There is too much error and fraud in our benefits and tax credit systems. These losses are unfair, unaffordable and unacceptable.
“Last month the government therefore launched radical new proposals to reduce the billions lost every year. We will now use credit reference agencies and data matching to spot patterns of fraud.
“The self-employed have to do their bit by telling us promptly of any changes in their income estimates.”