This figure includes up to £2.4billion in pension credits and about £1.5billion in child tax credits, which are likely to be overlooked by one in 10 of the families who qualify for them, even though a typical household benefits by £3,411 a year.
And if you fail to take action before the tax credits deadline on July 31, then you could well become one of those losing out.
Unbiased chief executive Karen Barrett said: “The system has been set up to help those who need it most and, quite simply, if you don't claim your credit, it expires.
“We would therefore urge people to review their situation now to ensure they don't miss out on what is rightfully theirs.”
Tax credits were changed in the emergency Budget and you can read more about that in my article ‘Budget announcements explained’.
But, even if you don’t have all the figures you need, you must do something by July 31; otherwise, your tax credits will be stopped.
Missing the deadline could even result in the taxman demanding repayment of any tax credits you have received so far this year. And there may also be penalties of up to £300.
Why do I have to renew my tax credits claim?
Tax credit claims generally only last for one tax year. At the end of each tax year, you must therefore make a new claim.
The purposes of this are twofold; firstly to renew your claim for the current tax year, and secondly to finalise your entitlement for the tax year that ended in April.
If your income and circumstances have changed during the course of the previous tax year, then you may have received too much or too little in the form of tax credits, so finalising the figures in this way enables HM Revenue and Customs to ensure it has paid you the right amount.
Consequently, you may receive a back payment, or have to pay some of the money you have already received back – although this will only happen if your income for the current year is more than £25,000 more than the previous year.
This is why you must still complete the renewals process even if you don't want to continue to get tax credits in 2010/11.
Meanwhile, the final figures for the previous tax year are also used to set your entitlement for the current 12 months, in this case April 2010 to April 2011.
How do I go about renewing?
If you already claim tax credits, you will probably have received two forms from the government.
These are form 603R, which relates to your annual review, and form 603D, relating to your annual declaration.
However, if you receive only the full family element of child tax credit at £545, or have a nil award, the Revenue will only send you form 603R.
If that is the case, and your circumstances are still the same – i.e. your income is still within the range shown on the form – you do not need to take any further action.
These are known as ‘auto renewal' cases.
But if, like the majority of claimants, you receive more than the family element or get something less than the full £545, then you must either complete and return both forms, or complete the same process by calling the tax credits helpline on 0845 3003900.
This is true even if you believe that you are playing the system by receiving more than you should, as such mistakes will generally be discovered sooner or later and the longer they are left to continue, the larger the repayment you have to make.
Similarly, if you have been paid too little up to the time you renew, filing the correct information will set the ball rolling in terms of you getting the extra cash you deserve.
Other points to make include that you must complete a fresh set of papers for each claim if you have been in more than one relationship during the year and made a claim in each capacity, even if the figures remain the same.
And even if you cannot yet give an accurate figure for your income for 2009/10, you must still file an estimate by the end of July.
You will then have until 31 January 2011 either to confirm or change the estimate, which can be useful for self-employed people who have not yet finalised their accounts.
Once you have renewed, your claim to tax credits for the current year 2010/11 is confirmed and your entitlement is backdated to April 6.
What if I miss the deadline?
If July 31 comes and goes without you contacting the Revenue with your information, you will receive a ‘statement of account' telling you that they have stopped your payments.
Any tax credits paid since the start of the tax year may also have to be repaid.
However, if you contact the Revenue within 30 days of receiving the ‘statement of account’, your renewal will be processed and your 2010/11 entitlement reinstated accordingly.
The only way to have your entitlement renewed if you miss that further 30-day grace period, is to convince the Revenue you have ‘good cause' for your failure to renew, and complete your renewal by January 31 2011.
Call the Revenue on 0845 3003900 for more information.