HMRC ask families to check their entitlement as the first cost of living payment is due to come out next month

More than a million families across the country who receive tax credits will receive their first payment to help with the increasing cost of energy bills, food and petrol, HMRC has confirmed.

The payment of £326 will be made automatically into the banks of those receiving the benefit between September 2 and September 7, and in total the HMRC will be paying £360m.

Nadhim Zahawi, chancellor of the exchequer, said: ‘I know people are really concerned by rising prices so I’m glad that over a million more low earners will shortly receive their first Cost of Living Payment. We are also preparing options for further support so the new prime minister can hit the ground running.

‘Alongside £400 off most people’s energy bills, tax cuts and the Household Support Fund, these direct payments are a very important part of our £37bn package of help for households, which is targeted at those who need it most.’

Tax credit claimants who also receive benefits from the Department for Work and Pensions have already received their first Cost of Living Payment from July 2022 in part of the scheme that the government have put together to see low income households receive a total of £1,200 this year.

Alongside the cost of living payments that people may be entitled to includes a £400 discount from the government to help with the cost of energy bills, a £150 tax rebate for houses in the council tax bands A-D and a £300 pensioner cost of living payment will be paid alongside a winter fuel payment.

This comes as there is increasing concern at the cost of essential items such as petrol and food, as well as astronomical energy bills that are resulting in people scrimping and saving to survive.

Angela MacDonald, HMRC’s deputy chief executive and second permanent secretary, said: ‘This first cost of living payment will provide vital financial support for eligible tax credit-only claimants across the UK. A second payment will be made to eligible customers from the winter.’