Tax credits are government benefits that are given to people who are taking care of children and other dependants, and those who are on low income. The aim of these benefits is to make it easier for caretakers to meet the costs of everyday life as they try to look for higher income opportunities.
There are mainly two types of tax credits;
- Child tax credit
- Working tax credits
Tax credits are means-tested; the amount you get will depend on your circumstances. This means that your National Insurance contributions will not be a determining factor when you apply for tax credits. You will not be required to pay taxes on any amount you get in benefits. You can call Tax Credits number 0843 455 0127 if you have any queries.
Child Tax credit
Child tax credit is a state benefit that aims at helping you with the costs of raising a child or children. Typically, children under 16 years or those up to 20 years but are in full time education can qualify for this benefit.
The amount given in CTC depends on a range of factors such as;
- Family income
- Whether the child lives with you or someone else
- Whether the child has a disability or not
When you make an application, the Tax Credit officer considers your circumstances as well as those of your partner to determine the amount you are entitled to. Let’s take a look how much you can get.
|The Element||Annual Amount|
|Each child||Up to £2,780|
|Each child with a disability||Up to £3,175 over the normal child rate|
|Each child with a severe disability||Up to £1,290 over the amount given to normal and disabled children|
These amounts apply to the 2017-18 tax year. Note that the amounts change annually; you may need to confirm the maximum amount you can get in the subsequent years. If you would like to confirm the maximum amount payable at any time, Tax Credits number 0843 455 0127 for accurate information.
How Your Income Affects Your Child Tax Credit Amount
The annual household income determines the limits of the amount you get in tax credits. If your income matches or is lower than the limits set, you can qualify for child tax credit.
- Households with childcare costs should have an annual income limit of £40,000 for 1 child, £55,000 for two and £65,000 for 3 or more children.
- Households that do not have child care costs should have an annual income limit of £25,000 for 1 child, £35,000 for two and £40,000 for 3 or more children.
Here is how it works; if your annual income is £16,105 or lower, you are entitled to the maximum amount payable for each child. This is the income threshold. Any amount you earn over this threshold reduces the amount of tax credits you can claim by 41p for every £1.
How to Claim Child Tax Credit
You can apply online on the government website or call Tax Credits number 0843 455 0127 and request to have an application form sent to you.
Changes Affecting Child Tax Credit
Since the benefits are given based on your circumstances, it is vital to communicate any changes in those circumstances immediately. For example, if you suddenly start earning less or more, communicate that to your Tax Credit officer.
Any income change of £2,500 or more should be communicated immediately so that the benefits are adjusted accordingly. Failure or delay in communication such changes may lead to you giving a refund of the excess benefit or losing out.
Working Tax Credit
These are government benefits that are meant to assist workers on low income to meet their daily living expenses. These benefits are given to both self-employed and employed workers.
The amount you receive as working tax credit is bases on your prevailing circumstances such as your income, whether or not you have a disability and whether or not you are taking care of children.
Note that you cannot be given working tax credit if you are already receiving Universal Credit.
Am I Eligible for Working Tax Credit?
Since Universal Credit came into effect, new working tax credit claims are only accepted if;
- You live in an area where Universal Credit is not yet in effect
- You or your parent qualify for pension credit
Those who qualify for the working tax credits should;
- Be 25 years or older and working the stipulated minimum number of hours
- Be between 16 and 24 years and have a disability or taking care of a child
The Stipulated Working Hours
|Circumstance||Minimum Working Hours per Week|
|Living with a disability||16|
|Lone parent (1 or more children)||16|
|Couple with children||24 between the two (with one working at least 16 hrs)|
How Much Is Given In Working Tax Credits
|Element||Maximum Annual Amount|
|The lone parent or couple||£2,010|
|If working at least 30 hours weekly||£810|
|If with a disability and still working||£3,000|
|If severely disabled||£1,290|
|If paying for registered/approved childcare||70% of childcare costs|
How to Claim For Working Tax Credit
Go to the GOV.UK website to apply. You can also call Tax Credits number 0843 455 0127 to get a claim form or to follow up on existing claims.
Updating Your Tax Credits
Tax credit claims are renewed annually; you might want to ensure that they are updated on time. You will receive a notification from the Tax Credits office asking you if you want to renew your claim.
If your circumstances have changed, and may affect the amount you get in benefits, it is important to declare them at this point. Even the most trivial of changes such as a child leaving home, or moving houses etc. should be communicated to the tax credit office.
Increase or decrease in income is among the changes that should be reported immediately as they affect the amount you can receive in benefits.
Working Tax Credit and Universal Credit
Working tax credit is among the six benefits that are being phased out as Universal Credit gradually replaces them. If you are already receiving working tax credits, you may not be affected by the change. However, anyone wishing to make a claim is directed to Universal Credit.
You cannot claim Universal Credit and tax credits at the same time. You can call Tax Credits number 0843 455 0127 for more details on the transition, how to fill the proper forms and information on how the transition affects you.
Tax Credits number
Lines are open:
08:00 to 20:00 Monday – Friday
08:00 to 16:00 Saturdays
09:00 to 17:00 Sundays
Tax credit renewal forms:
HM Revenue and Customs – Tax Credit Office.
NEW tax credit claims:
HM Revenue and Customs – Tax Credit Office.
For complaints, changes in circumstances:
HM Revenue and Customs.
Tax Credit Office,