Support for families and workers with Tax Credits

Tax credits are a tax-free, means-tested state benefit to support low-paid workers and their families – and despite the name, Tax Credits have nothing to do with paying tax. There are two types: child tax credits for families with children and working tax credits for people in work. 

Tax Credit payments are estimated based on your previous year’s income, so it is crucial that you let the Tax Credit office know about any changes to your circumstances that may affect your Tax Credits, instead of waiting for your Tax Credit renewal – if you don’t, you might end up being under- or overpaid!

You must tell the Tax Credit Office about any change in:

 

Child Tax Credit

If you’re a parent taking care of any child or children who are eligible for child benefit, whether or not you are in work, you may be able to claim Child Tax Credits. Eligible children must be under 16 years of age, or up to 20 years of age and in full-time education or registered with the careers service.

There are several parts (called Elements) to Child Tax Credits – your circumstances will determine which Elements you are eligible for, and your income will affect how much you receive. 

 

CHILD TAX CREDIT ELEMENT

MAX ANNUAL AMOUNT 2016/17

Family Element – for anyone with one or more children

£545

Child Element – an amount per child

£2,780

Disabled Child Element – an amount for each child that receives Disability Living Allowance/Personal Independence Payment or registered as blind, in addition to the Child element

£3,140

Severely Disabled Child Element – when a child receives the highest rate care Disability Living Allowance/Personal Independence Payment, in addition to the Child and Disabled Child Elements

£1,275

 

In households where the total income is £16,105 or less, you’ll receive the maximum amounts in the above table, whereas households with a greater income will receive a reduced amount. The threshold of maximum household income depends on how many children you are responsible for.

 

NUMBER OF CHILDREN

MAX INCOME 2016/2017

One

£26,200

Two

£33,000

Three

£39,750

Four

£46,500

 

Since Child Tax Credit generally stops when children are 16 years old, it is crucial that you let the Tax Credit Office know if your child/children will stay in education after their GCSEs – if not, the office will assume that your child/children are no longer in full-time education and therefore stop Child Tax Credits and Child Benefit!

 

Working Tax Credit

Anyone in work, whether or not they have any children, may be able to claim Working Tax Credits – these are to give lower-paid workers an extra boost and make sure you are better off in work than not.

Payments fall into one of three categories:

 

As with Child Tax Credit, there are several Elements to Working Tax Credit: 

WORKING TAX CREDIT ELEMENTS

MAX ANNUAL AMOUNT 2016/2017

Basic Element – for anyone working the correct hours and meeting the tax credit criteria

£1,960

Couples and Lone Parent Element – for a second eligible person or a for a single parent

£2,010

30 hour Element – for claimants working at least 30 hours per week, paid per couple

£810

Disability Element – for working claimants who receives Disability Living Allowance/Personal Independence Payment or AA or registered as blind

£2,970

Severe Disability Element – when claimants receive the highest rate care allowance Disability Living Allowance/Personal Independence Payment, in addition to the Child and Disabled child elements

£1,275

Childcare Element – may allow you to claim back up to 70% of your eligible childcare costs

N/A

 

In households where the total income is £6,420 or less, you’ll receive the maximum amounts listed above. Households with a greater income will receive a reduced amount. The threshold of maximum household income (excluding disability element) depends on how many children you are responsible for.

 

NUMBER OF CHILDREN

MAX INCOME 2016/17

None, single

£13,000

None, couple

£18,000

One

£41,700

Two

£59,600

Three

£66,450

Four

£73,100

 

Claiming Tax Credits

You can check the GOV.UK Tax Credit Calculator to work out if you might be entitled to Tax Credits.

To claim Tax Credits you can either use the online tool from GOV.UK to work out if you qualify or call the Tax Credit Office directly, and request a claim form (these usually take approximately 2 weeks to arrive).

It is not possible to claim both Tax Credits and Universal Credit in either case. This is because the Universal Credit system is bringing six State benefits into one system, and this includes Tax Credits. Universal Credit is being slowly rolled out across the country, and may not yet be available in your area (you can read this rollout schedule, or check this jobcentre list and map to find out when Universal Credit will be available at your local jobcentre).

 

Contact the Tax Office:

Online at “Manage your tax credits

Telephone: 0345 300 3900

Textphone: 0345 300 3909

From outside the UK +44 2890 538 192

Opening hours are 8 am to 8 pm Monday to Friday, and 8 am to 4 pm on Saturday.

 

Renewing Tax Credits

Anyone receiving Tax Credits will be sent a renewal package each year around May/June. The deadline for submitting your renewal is 31 July. However, this renewal package is not only for renewals for the upcoming year, it is also to check that you were paid correctly last year – so even if you’re not planning on claiming next year, you should still complete the renewal package so the Tax Credit Office can assess whether you were paid the correct amount or not for the last year.

 

Tax Credit Services Online

Tax credit renewals can also be done online through the current system, Government Gateway – but soon this service will also be available through GOV.UK Verify. 

GOV.UK Verify is the new, safer, simpler and faster way to prove your identity, online. To access GOV.UK services online, you’ll need to register with GOV.UK Verify and have your identity checked by a Government Certified identity provider, like CitizenSafe.

CitizenSafe is the only Government identity provider that is 100% dedicated to identity verification – it’s all we do! After you’ve had your identity checked with us, you’ll be able to use that one login to access all available GOV.UK online services, whenever and wherever is most convenient for you!

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