Tax credits
If you're struggling to keep your head above water with everyday costs, government help is at hand. Here's how to make sure you're getting that all-important boost to your income.
In a nutshell
- Tax credits are a government benefit based on income and circumstance.
- There are two types of tax credit: the Child Tax Credit, generally available to individuals responsible for children or young people, while the Working Tax credit mainly serves people in low-paid work.
- Both types of tax credit are paid on a weekly or a four-weekly basis, depending on what suits you. The amount is usually paid directly into your bank, building society or Post Office account.
Child tax credit - how do I qualify?
Generally you are eligible to claim for Child Tax Credit if you are a parent or full time carer and responsible for at least one child under 16 or a young person in full-time further education or a government-approved training program. You don't have to be working to claim, but you'll need to provide HM Revenue & Customs (HMRC) with the following details:
- Your income
- Your partner's income (if you have one)
- Any other children in your family
What else should I know?
Child Tax Credit is means-tested. So, if you make a claim, the amount you are entitled to will depend on your annual income and/or your partner's income if you live together. This must not exceed £58,175 in order to qualify, or £66,350 if you have just one child under one.
There are several elements to a Child Tax Credit payment:
- A family element, worth up to £545 each year
- A baby addition in the first year of £545
- A child element, worth up to £2,235 each year for every junior member of your family (from April 2009 -10)
- Additions for children with disabilities.
Child Tax Credit is paid directly to the parent or carer.
How do I find out if I can claim?
- Call the Tax Credit Helpline on 0845 300 3900. If you are hearing or speech impared then use the textphone number 0845 300 3909.
- Have your National Insurance number at hand as you will be asked to provide it as proof of identity.
- Should your circumstances change it could affect the amount of tax credits you receive. Call the helpline if you have any change in terms of your household arrangements, number of children or work arrangements. Do this as soon as possible, as some changes need to be reported within one month.
Working tax credit - how do I qualify?
You should be eligible to claim if you are aged 16 or over, in work for at least 16 hours a week, and:
- You or your partner are responsible for a child or young person
- You have a disability which puts you at a disadvantage in getting a job and you satisfy either the 'qualifying benefit' test or the special 'fast-track' rules to qualify for a disability element.
Otherwise you must normally be aged 25 or over and work 30 hours a week. The amount your receive will be calculated based on your personal income.
How do I find out if I can claim?
The tax credits rules are complicated, so it's worth getting help working out what you qualify for. You can talk it through with someone by calling the Tax Credit Helpline on 0845 300 3900 or textphone 0845 300 3909. Detailed rules about tax credits are available on the HMRC's website.
Written by Matt Whyman
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