Tax Credits
What are Tax Credits?
Tax Credits are a payment from the government and offer extra financial support to help with your everyday costs. There are two types of tax credits - Child Tax Credit and Working Tax Credit.
Child Tax Credit is a payment created to support families, or individuals with at least one child or young person who they are responsible for.
Working Tax Credit is additional financial support for persons in employment on a low income. Both of which can be claimed for at the same time.
Child Tax Credit
90% of families with children qualify to receive child tax credit. How much you receive depends on your individual circumstances for instance :
- How many children you have living with you. You may get more if you care for any children under the age of one
- If you or any child living with you has a disability
Your payments also depend on your income. The lower your income, the more tax credit is awarded.
Anyone who's mainly responsible for a child can claim. If responsibility is shared with someone whom you live with as if you were married or civil partners, you must claim together regardless as to whether you're married or civil partners or not.
If you share responsibility with someone else who doesn't live with you, and the children also live with them for part of the time, you must decide between you who has main responsibility. Only the person with main responsibility can claim Child Tax Credit.
Working Tax Credit
Working Tax Credit can be applied for to top up your earnings if you are in employment but on a low salary. This includes help with childcare fees. You can claim this whether you're employed or self-employed and if you are ;
- A lone parent, aged 16 or over and working at least 16 hours per week
- In a couple, both aged 16 or over and both working at least 16 hours per week
The childcare element of Working Tax Credit is aimed specifically at helping working parents with the cost of registered and approved childcare.
It can pay up to 80% of childcare costs. Which means that for every £100 you pay you receive £80 back
The maximum you can receive is £140 per week for one child and up to £240 per week for two or more children
Do I qualify for Tax Credits or Working Tax Credit?
Below are some examples of the allowances payable under the Childcare Element of Working Tax Credit ;
| Annual Gross Income(before deductions) | Single Parent | Number of eligible children | Hours worked per week | Childcare costs per week | Working Tax Credit Payable (Childcare Element) |
| £10,000 | Yes | 1 | 35 | £90 | £72 per week |
| £15,000 | Yes | 1 | 35 | £175 | £140 per week |
| £20,000 | Yes | 1 | 35 | £175 | £114 per week |
| £30,000 | Yes | 1 | 35 | £175 | £43 per week |
| £32,000 | No | 2 | 1 works 40 1 works 16 |
£200 | £49 per week |
Click here to find out if you qualify for tax credits or working tax credit.
http://www.hmrc.gov.uk/taxcredits/do-you-qualify.htm
When can I Claim?
As soon as you start paying for childcare costs, you can claim the childcare element of working tax credits. You can claim for only a short period, for example, a few weeks in the school holidays.
You must tell HMRC as soon as you stop using the childcare to avoid being overpaid as you will have to pay any overpayment back.
How to Claim
You can order a claim pack over the phone by calling the tax credits helpline on 0845 300 3900. Lines are open every day (except Christmas Day, Boxing Day, New Year's Day and Easter Sunday) from 8am to 8pm.
If you're part of a couple or civil partnership and you both work at least 16 or 30 hours a week, you will have to decide who'll get the Working Tax Credit payments.
For more information on eligibility and how to claim tax credits, please visit
