Tax credits
If you're struggling to keep your head above water with everyday costs, government help is at hand. Here's how to make sure you're getting that all-important boost to your income.
In a nutshell
- Tax credits are a government benefit based on income and circumstance.
- There are two types of tax credit: the Child Tax Credit, generally available to individuals responsible for children or young adults, while the Working Tax credit mainly serves people in low-paid work.
- Both types of tax credit are paid on a weekly or a monthly basis, depending on what suits you. The amount is paid directly into your bank, building society or Post Office account.
Child tax credit - how do I qualify?
You are eligible to claim for Child Tax Credit if you are a parent/full time carer and responsible for at least one child under 16 or a young person in full-time education/a government-approved training program. You don't have to be working to claim, but you'll need to provide HM Revenue & Customs (HMRC) with the following details:
- Your income;
- Your partner's income (if you have one);
- Any other children in your family.
What else should I know?
Child Tax Benefit is means-tested. So, if you make a claim then the amount you are entitled to will depend on your annual income and/or your partner's income if you live together. This must not exceed £58,175 in order to qualify, or £66,350 if you have just one child under one.
There are two elements to a Child Tax Credit payment:
- A family element, worth up to £545 each year;
- A child element, worth up to £2,085 each year for every junior member of your family (from April 2008-9).
The amount you receive will depend on your income and will be paid directly to the parent/carer.
How do I find out if I can claim?
- Call the Tax Credit Helpline on 0845 300 3900.
- Have your National Insurance number at hand as you will be asked to provide it as proof of identity.
- Should your circumstances change it could affect the number of tax credits your receive. Call the helpline if you have any change in terms of your household arrangements, number of children or work arrangements.
Working tax credit - how do I qualify?
You're eligible to claim if you are:
- Aged 16 or over and work 16 hours or more a week;
- Aged 16 or over, in work and live with a disability;
- Aged 16 or over, in work and responsible for one child or more;
- Aged 25 or over and work at least 30 hours a week;
- Expected to remain in employment for a minimum of four weeks.
What else should I know?
If you're living with a partner, Working Tax Credit is paid to the person who is working 16 hours a week or more. If you're both working 16 hours a week or more, you must choose which one of you will receive the tax credit.
If you're a working parent, you may also qualify for help towards the cost of childcare. The ChildCare Element forms part of the Working Tax Credit. This can amount to up to 80p for every £1 you pay out to registered child carers or nurseries. It is means-tested, however, so your income per year is used as a basis to calculate the amount of working tax credits you will receive. Visit the Inland Revenue Tax Credit Calculator to find out if you qualify.
For more information relating to your income, check out HMRC's leaflets.
How do I find out if I can claim?
- Call the Working Tax Credit helpline on 0845 302 1415.
- Have your National Insurance number at hand as you will be asked to provide it as proof of identity.
- Should your circumstances change it could affect the number of tax credits your receive. Call the Helpline if you have any change in terms of your work or childcare arrangements.
