What are Tax Credits?
Tax Credits are payments from the Government, which can help families with children and workers that don’t earn very much. There are two types available; Child Tax Credit and Working Tax Credit.
Child Tax Credit is available to anyone responsible for at least one child under 16 (or under 20 and in education or training), while Working Tax Credit is for working people on low incomes. Depending on your circumstances, you may be eligible for one or both of these.
How much money can you get?
This depends entirely on your circumstances.
Both Child Tax Credit and Working Tax Credit offer a basic amount as well as further ‘elements’ that can be layered on top depending on which criteria you meet.
The Tax Office considers factors such as: how many children you have, if you live alone or in a couple, if you pay for childcare, how many hours you work and if you or your partner or your child has a disability.
You can take a look at the Tax Credit entitlement tables online, which sets out a sliding scale of payments based on income in a range of different scenarios.
But as a rule of thumb, if your annual salary is not higher than any of the following limits, you are probably entitled to Tax Credits:
- £13,000 for a single person with no children, working at least 30 hours a week (higher thresholds apply if disabled)
- £18,000 for a couple with no children, where at least one partner works 30 hours or more a week (higher thresholds apply if one partner works and is disabled)
- £20,000 if you (and your partner if applicable) are not working/ working less than 16 hours and you have one child (higher thresholds apply if you have more children)
- £25,000 if you work at least 16 hours a week, or if living with a partner between you work at least 24 hours a week, pay no childcare and you have one child (higher thresholds apply if you have more children)
- £30,000 if you (and your partner if applicable) work at least 16 hours a week and pay for childcare for one child (higher thresholds apply depending on your childcare costs and if you have more children)
For more detail you can fill out an online questionnaire to find out if you qualify and use the tax credits calculator or call the Tax Credit Helpline (0345 300 390) for a clearer idea of what you might be able to get.
When should you claim?
You need to make a claim as soon as you think you qualify, otherwise you’ll join the thousands of other people missing out on this benefit, as credits can only be backdated by a month.
If you live with someone else as a couple whether married, in a civil partnership or co-habiting, you need to make a joint claim, which means filling out information about both of you on the form.
For Child Tax Credits you can claim as soon as a baby is born and with Working Tax Credit you can claim after starting a new job, or if you’re on benefits like Job Seeker’s Allowance you can usually start claiming seven days before you start a new job.
How do you claim Tax Credits?
In the first instance you need to fill out a Tax Credit claim form.
You can get one by calling the Tax Credit Helpline on 0345 300 390 (open 8am-8pm, Monday to Friday and 8am-4pm, Saturday). You can also order a claim form online after completing a questionnaire that determines if you qualify.
Before you call the helpline or go online to request a claims form, you'll need to know:
- Your National Insurance number
- You and your partner's income for the last tax year if employed or self-employed
- Details of income from other sources like savings accounts, pensions or rent
- Details of any benefits you already get
- Details of any childcare payments you make
- The number of hours you work per week
If successful in the initial screening a claims pack including the claims form will be sent out, which can take up to two weeks to arrive.
Within the claim pack you receive there will be guidance notes to take you through each step, but if you need further advice you can call the Tax Credit Helpline (0345 300 390) or organisations like Citizens Advice.
You can apply for Child Tax Credit and Working Tax Credit on the same form.
Where do you send the form?
When you’ve completed the claim form, you need to send it off to the following address:
HM Revenue & Customs – Tax Credit Office
Liverpool
L75 1AZ
If you’re receiving any other benefits, such as Jobseeker’s Allowance, you can hand in the form to your local Jobcentre Plus branch or Social Security Office for those living in Northern Ireland.
How long will a decision take?
The Tax Office can take up to five weeks to process a new claim.
If successful the money will be paid into your account each month, and every year you need to renew the Tax Credits you receive to make sure you're getting the right amount and all your details are correct.
If your circumstances change at all, for example you get a new job or have another child, you need to tell the Tax Office immediately.