Tax Credits

A Tax Credit isn’t an actual tax: it is money that you can receive regularly from the HM Revenue and Customs if you are on a low income. There are two different types of Tax Credit: the Child Tax Credit and the Working Tax Credit. Both types are means-tested.

Child Tax Credit

Child Tax Credit (CTC) is in place to support families with children, whether or not those families are in work. It is made up of the Child Element for each child (with some extra if the child is disabled) and the Family Element.

CTC threshold is £40,000, across all age groups, as the baby element is being removed. This figure will be reduced to £30,000 from April 2012.

Qualifying for Tax Credits is dependent upon how many children or qualifying young people live with you; whether the child or young person living with you is disabled; and your income.

You don’t have to be a parent to claim CTC. As long as you are the person who has main responsibility for the child or young person, you can make the claim. If you are a married couple, civil partners or living with someone as if you were married, you should make one claim as a couple.

However, if you share responsibility for a child with someone that you do not live with and the child also lives with them for part of the time, you will need to decide who is mainly responsible for the child; that person should then make the claim.

Working Tax Credit

Working Tax Credit (WTC) is in place to support those on low and middle incomes, including those who do not have children. If you have a child, you can claim WTC if you are aged 16 years or over and work at least 16 hours per week. If you are part of a couple, both partners must be working at least 16 hours per week (unless prevented by disability).

The amount of income not taken into account will be lowered from £25,000 to £10,000 between 2011 and 2012; it will then be lowered to £5,000 between 2013 and 2014. WTC contains several elements, including additional amounts for working people with a disability, people with a severe disability and the costs of ‘registered’ or childcare.

The Childcare Element and can be claimed if you use childcare registered with Ofsted.

It is worth up to 70p in Tax Credit for every £1 per week you spend on childcare. This applies up to a limit of £122.50 per week if you have one child, and up to £210 per week if you have two or more children. The Childcare Element will always be paid to the main person who is responsible for caring for the child or children. It will be paid alongside CTC payments.

Please note: from April 2012, the period for which a claim and certain changes of circumstance can be backdated will be reduced from three months to one.


Further Information

You can contact the Family Information Service for more details if you have not already done so. You can claim Tax Credits by filling out the TC600 Form. This can be picked up at your local Jobcentre Plus Office or by calling the Tax Credit Helpline on:

  • Telephone: 0845 300 3900, Monday to Sunday between 8am to 8pm
  • Textphone: 0845 300 3909 Monday to Sunday between 8am to 8pm

For more information you can look at the HM Revenues and Customs website.       

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