Am I entitled to tax credits?

simon chandler
By Simon Chandler

british money

Tax credits are a very useful way of boosting a household's income, especially for young working families with children.

While such credits aren't available to everyone, they can often make a significant difference to people's lives, adding as much as several hundred pounds a month to their income.

However, the conditions of eligibility vary quite widely from case to case, which is why we've put together a guide that outlines who's entitled to them and what needs to be done to claim.

Working, no child or disability

Section menu
Credits for workers without children
Working with a disability
Amounts and limits for workers with children
Help with paying for childcare
General tips on Working Tax Credit
Payments and elements
Help for people with children
Taking away the 'Family Element'
Closing pieces of advice

Even for those who don't have children and don't have a disability, Working Tax Credit (WTC) is available so long as they work at least 30 hours a week and are at least 25 years old.

The amount paid out varies with income, as exemplified in the table below. It also varies according to whether the claimant is a single working person or a working person living with a partner.

Annual incomeSingle, at least 25 and works 30 or more hours a weekCouple, one of you is at least 25 and works 30 or more hours a week

Here, one thing to note is that the threshold at which people stop being eligible for WTC varies depending on whether the claimant is living with their partner or not.

Working and disabled, but no child

Something very similar applies to those who are working and have no children, but who also have a disability.

This time, however, WTC is available to those who are at least 16 years old. Added to this, it's also available to those who work between 16 and 30 hours a week, as well as more than 30 hours, as detailed below:

Annual incomeSingle, at least 16 and works between 16 and 30 hours a weekSingle, at least 16 and works at least 30 hours a weekCouple, one of you is at least 16 and works between 16 and 30 hours a weekCouple, one of you 16 or over and works 30 or more hours a week
£5,500£4,930less than the minimum wage (no one should be paid this annual amount for working 30 hours a week)£6,940less than the minimum wage
£8,000£4,285less than the minimum wage£6,295less than the minimum wage
£9,850£3,525less than the minimum wage5,535less than the minimum wage

Working with children

Compared to those who work without a disability or children, those who work and are parents can expect to receive a little bit more tax credit.

Once again, everything varies here, but it's worth noting that the cut off point for people with one, two or three children is £25,000, £30,000 and £25,000 respectively. Any more than these annual amounts, and the applicants can expect to receive nothing.

Annual incomeTax credits for 1 childTax credits for 2 childrenTax credits for 3 children

One important thing to remember is that, from April 6th 2017, tax credits will not be available for any third child born after this date.

Another important thing is that, for the annual income figures between £0 and £9,850, the Child Tax Credits shown above apply only if the claimant works between 16 and 30 hours a week and is single. If they're part of a couple, then the hour requirements become at least 16 hours for one person, and less than 14 hours for the other.

By contrast, for the income bands including £10,000 and above, then the claimant needs to work at least 30 hours, or needs to work at least 16 hours while their partner works at least 14.

Working with children and paying childcare

This picture changes slightly in the event that working parents are also paying for childcare.

The following table reveals that, in such a case, working parents with one child receive more tax credit, adding as much as £4,000 a year in some circumstances.

Annual income£90 a week child care costsMaximum child care (£175)

A more general guide to Working Tax Credit

Working Tax Credit (WTC) is the most common form of credit provided by the Government, with some 4.5 million households claiming them as of 2014-15, in comparison to 3.9 million households claiming child tax credit as well.

However, just to be clear, it and other varieties of tax credit have very little to do with tax.

Unlike tax relief, eligibility isn't dependent on a claimant paying any tax, but rather on them working a certain number of hours per week and receiving an income under a certain threshold.

As the table below makes clear, these numbers vary from one type of person to another, particularly for those with and without children:

CircumstanceHours a week
Aged 25 to 59At least 30 hours
Aged 60 or overAt least 16 hours
DisabledAt least 16 hours
Single with 1 or more childrenAt least 16 hours
Couple with 1 or more childrenUsually, at least 24 hours between you (with 1 of you working at least 16 hours)

For the record, the Government classes as a child anyone under 16, or anyone under 20 and in educating and training.

Also, while couples with at least one child are normally required to work for a combined total of at least 24 hours a week, there are a couple of exceptions to this requirement:

Added to such requirements, there are also the conditions on total income, although the Government make it clear on their website that there are no set limits on income, and that the threshold "depends on your circumstances".

However, aside from the tables displayed at the top of this feature, they offer some rough examples as a guide. For instance, for a couple without children, they must be earning less than £18,000 a year, whereas a single person without child can't earn beyond £13,100.

Yet when it comes to households with dependents, these thresholds are raised, but yet again by a variable amount. They're also raised if the household pays for approved childcare, or if one member of a couple is disabled.

Payments and 'elements'

If applicants fulfil any of the sufficient criteria, they'll receive either monthly or weekly payments, depending on their own preferences.

As can be expected, these will vary with circumstances, yet the basic amount is up to £1,960 a year.

On top of this, WTC provides numerous extras - known as "elements" - to claimants in particular situations. These top up the amount paid in various ways, as shown by the table below:

You're a couple applying togetherUp to £2,010 a year
You're a single parentUp to £2,010 a year
You work at least 30 hours a weekUp to £810 a year
You have a disabilityUp to £2,970 a year
You have a severe disabilityUp to £1,275 a year (usually on top of the disability payment)
You pay for approved childcareUp to £122.50 (1 child) or £210 (2 or more children) a week

Given that conditions and payments can vary so much from person to person, working out just what a particular claimant would be entitled to can initially be confusing.

That's why, if in doubt, people who think they fall into at least one of the qualifying brackets should simply go ahead and make a claim, since the Government will do all the calculating for them.

To do this, they need simply use the online tool to order a claim form, or they can call the following number on any day of the week: 0345 300 3900.

Child Tax Credit

Other relevant guides
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How to avoid paying too much tax
Boosting your income with your home
A short saving glossary

This is also what they need to do if they'd like to claim Child Tax Credit (CTC), although fortunately the latter isn't quite as complicated as WTC.

In short, eligibility depends simply on the age of the claimant's children, and on whether he or she is "responsible" for them.

According to the Government, this is the case if at least one of the following conditions apply:

And even if these criteria don't clarify which of a child's parents is "responsible" for him or her, the Government advise that both apply, at which point the Tax Credit Office will apply for them.

They can also apply if they're caring for an adopted or fostered child, and if they're not receiving any money towards this from their local council.

And as with WTC, the Government defines a child as anyone under 16, or anyone under 20 and in education or training.

Family element

Another parallel between CTC and WTC, is that Child Tax Credits have a basic amount and also extra elements.

The basic amount is known as the "family element", which can provide up to £545 a year.

However, from April 6th 2017, claimants will receive the family element only if they're responsible for children born before that date.

In other words, it has been scrapped for households with children born after this date, a cut that was introduced in the Autumn Statement of 2015.

It was this same year that the Government also announced that, also from April 6th 2017, CTC will be claimable only for the first two children a family have. Even more controversially, the Government allowed for tax credits to be claimable for a third child, so long as the mother can prove that the birth of this child was the result of rape.

With these reductions, households claiming CTC for children born after April 6th will be reliant on the extra elements. These are listed below:

ElementsYearly amount
For each child (this is known as 'the child element')Up to £2,780
For each disabled childUp to £3,140 (on top of the child element)
For each severely disabled childUp to £1,275 (on top of the child element and the disabled child element)

But once again, such amounts are dependent on claimants having incomes below a certain threshold, and once again, these thresholds vary from case to case.

That said, the Government explain that "it's sometimes £26,100 for a one child family", but can be higher if the family pay for childcare and/or one of the parents is disabled.

This should provide a rough indication of what's required. However, it is only a rough indication, so even if potential applicants suspect they sit just above the threshold, it's still worth making a claim, just in case they don't.

Closing advice

Disregarding these pointers for each specific tax credit, one thing that should be remembered is that people are immediately ineligible to claim either CTC or WTC if they're already in receipt of Universal Credit.

Aside from that, there are no other significant requirements or terms, yet there are a number of general guidelines claimants would be advised to remember.

For one, Citizens Advice recommend that applicants or recipients complain if the level of service they receive falls below an acceptable standard.

For example, if there are long delays in dealing with an application, if mistakes regarding payment are made, or if misleading or incomplete information is given, then the charity advises that claimants should consider complaining.

They can do this first by talking informally to the person they've been dealing with or their manager. If this doesn't resolve the issue, then they can take their complaint further by writing to the Tax Credit Office and/or HM Revenue & Customs (HMRC).

And if this still doesn't deal with the problem, claimants can take their issue to the Independent Case Examiner or the Adjudicator's Office.

Another option for those who are unhappy with the amount they're awarded by HMRC is to ask for a Mandatory Reconsideration.

This requires the Tax Credit Office to reconsider a decision on a new claim, or a decision to change a pre-existing claim, or a decision to not accept a request (from the claimant) to change a claim.

It has to be made within 30 days of a decision, but it means that a different decision maker (within the Credit Office) will look at the claimant's case again, and will usually produce a judgement within 14 days of receipt.

That's no guarantee that they will produce a more favourable decision, of course, but it at least shows that, at a time when the Government are constantly looking for excuses not to spend money, people have at least some recourse for challenging their stinginess.

And beyond that, at a time when incomes and living expenses are so tight, it's simply reassuring to know that the rights of people to receive Tax Credits have some degree of protection, even if the Government's current freeze on them means they're being reduced in real terms.

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