Tax credits
If the recession has squeezed your income, you may be entitled to government help. But lots of people entitled to tax credits don't claim - make sure you're not one of them.
In a nutshell
- Tax credits are government benefits based on income and circumstance
- There are two types of tax credit: Child Tax Credit, generally available if you're responsible for one or more children or young people; and Working Tax Credit, which is generally paid to 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, usually 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 have the main responsibility for at least one child under 16 or a young person in full-time further education or a government-approved training programme. 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?
Tax Credits are 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 a child under one.
There are several elements to a Child Tax Credit payment:
- A family element, worth up to £545 each year (in tax year 2010-2011)
- A baby addition in the first year of £545
- A child element, worth up to £2,300 each year for every junior member of your family (from April 2010-11)
- Extra money 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 impaired 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.
- It's worth knowing that some people have claimed tax credits and have ended up having to repay money they weren't entitled to. It's important that you tell HM Revenue & Customs about any changes to your circumstances as quickly as possible. Changes which could affect your benefits are your boyfriend or girlfriend moving in with you, getting a better paid job (or losing your job) or having a change in the number of children living with you.
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 are responsible for a child or young person
- You have a disability which puts you at a disadvantage in getting a job
Otherwise you must normally be aged 25 or over and work 30 hours a week. The amount you receive will be calculated based on your personal income
How do I find out if I can claim tax credits?
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 website. If you're on a low income, you may be able to get help on claiming for tax credits from the Low Income Tax Reform Group.
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