Tax Credits

Overview

Tax Credits are claimed and paid through HMRC. In most cases, tax credits have been replaced by Universal Credit.

There are two types of tax credits:

  • Working Tax Credit
  • Child Tax Credit

If you are already claiming tax credits and remain eligible, these will be renewed annually until your local area rolls out Universal Credit, the government has delayed full roll out to 2024. Current claimants will be sent an annual declaration pack to complete by a certain date and must return this or submit online to prevent your claim from ending, you can also renew by phone.

If you have children moving from high school to higher education, it is important to notify both Child Benefit and HMRC that your child is remaining in education. If you claim council tax reduction and housing benefit, you must also let your local authority know to avoid overpayments. Benefit departments are not yet co-ordinated with these changes.

Child Tax Credit

Child Tax Credit is paid to help people with the costs of bringing up a child. It is being replaced by Universal Credit so only some people can still claim Child Tax Credit.

Eligibility

You can only make a new claim for Child Tax Credit if you:

  • get the severe disability premium, or are entitled to it
  • got or were entitled to the severe disability premium in the last month, and you’re still eligible for it

If your child is 16, you can claim up until 31 August after their 16th birthday. If they are in approved education or training, you can claim until their 20th birthday.

You can only claim Child Tax Credit for children you’re responsible for:

Children you are responsible for

You are usually responsible for a child if:

  • they live with you all the time
  • they normally live with you and you’re the main carer
  • they keep their toys and clothes at your home
  • you pay for their meals and give them pocket money
  • they live in an EEA country or Switzerland but are financially dependent on you

If you cannot make a new claim for Child Tax Credit, you may be able to apply for Universal Credit (or Pension Credit if you and your partner are State Pension age or over).

If you adopted or fostered a child

You can claim for an adopted or fostered child if you’re not getting money from your local council (Health and Social Services Board in Northern Ireland). If you do get money, call HMRC to find out if you can claim.

If you are responsible for a disabled child

You may get extra Child Tax Credits if your child either:

You still qualify if Disability Living Allowance, Personal Independence Payment or Armed Forces Independence Payment stops because the child goes into hospital.

Child Tax Credit rates

The maximum annual Child Tax Credit rates are shown below.

Rates (£ per week)2020 to 20212019 to 20202018 to 2019

Child Tax Credit family element

2020 - 2021 - £545

2019 - 2020 - £545

2018 - 2019 - £545

Child element

2020 - 2021 - £2,830

2019 - 2020 - £2,780

2018 - 2019 - £2,780

Disabled child element

2020 - 2021 - £3,415

2019 - 2020 - £3,355

2018 - 2019 - £3,275

Severely disabled child element

2020 - 2021 - £1,385

2019 - 2020 - £1,360

2018 - 2019 - £1,325

How to claim

Call HM Revenue and Customs to make a new claim for Child Tax Credit.

It can take up to 5 weeks to process a new claim.

HM Revenue and Customs

Telephone: 0345 300 3900

Textphone: 0345 300 3909

Outside UK: +44 2890 538 192

Monday to Friday, 8am to 8pm

Saturday, 8am to 4pm

How you are paid

See How & when Benefits are paid

Working Tax Credit

Working Tax Credit is money provided to boost the income of working people that are on a low income, and that work a certain amount of hours per week.

Eligibility

You can only get Working Tax Credit in the following situations:

  • You are getting tax credits (Working Tax Credit or Child Tax Credit) at present, unless you claim Universal Credit, or
  • You are getting a Severe Disability Premium.

In addition:

  • You and/or your partner must work full time, though this means a different number of hours per week for different people:
  • Unless you satisfy any of the special conditions below, you will need to be over 25 years old and will need to work at least 30 hours per week,
  • If you are single and are responsible for a child or qualifying young person, you will need to be over 16 years old and will need to work at least 16 hours per week.
  • If you live with a partner who gets ESA, PIP, DLA or Attendance Allowance and you are responsible for a child or qualifying young person you will need to be over 16 years old and will need to work at least 16 hours per week
  • If you live with a partner who gets Carer’s Allowance or who is in hospital or in prison, and you are responsible for a child or qualifying young person, you will need to be over 16 years old and will need to work at least 16 hours per week
  • If you have a disability which means you can get a disability element, you will need to be over 16 years old and will need to work at least 16 hours per week
  • If you are over 60 years old you will have to work at least 16 hours per week.

If your hours are not the same every week or you need help to calculate how many hours you work, see our Working Hours for Benefits page.

If you are self-employed

Some self-employed people are not eligible for Working Tax Credit. To qualify, your self-employed work must aim to make a profit. It must also be commercial, regular and organised.

This means you may not qualify if you do not:

  • make a profit or have clear plans to make one
  • work regularly
  • keep business records, such as receipts and invoices
  • follow any regulations that apply to your work, for example having the right licence or insurance

If the average hourly profit from your self-employed work is less than the National Minimum Wage, HM Revenue and Customs may ask you to provide:

  • business records
  • your business plan - find out how to write a business plan
  • details of the day to day running of your business
  • evidence that you have promoted your business - such as advertisements or flyers

Your pay

The work must last at least 4 weeks (or you must expect it to last 4 weeks) and must be paid.

This can include payment in kind (for example farm produce for a farm labourer) or where you expect to be paid for the work.

Exceptions

Paid work does not include money paid:

  • for a Rent a Room Scheme (less than £7,500 or £3,750 for joint owners)
  • for work done while in prison
  • as a grant for training or studying
  • as a sports award

Your income

There is no set limit for income because it depends on your circumstances (and those of your partner). For example, £18,000 for a couple without children or £13,100 for a single person without children, but it can be higher if you have children, pay for approved childcare or one of you is disabled.

What you will get

You get a basic amount and extra (known as ‘elements’) on top of this.

How much you get depends on things like your circumstances and income.

The basic amount is up to £3,040 a year.

ElementAmount

You are a couple applying together - Up to £2,045 a year

You are a single parent - Up to £2,045 a year

You work at least 30 hours a week - Up to £825 a year

You have a disability - Up to £3,220 a year

You have a severe disability - Up to £1,390 a year (usually on top of the disability payment)

You pay for approved childcare - Up to £122.50 (1 child) or £210 (2 or more children) a week

How you are paid

See How & when Benefits are paid

If your circumstances change

Your tax credits can go up or down if your family or work life change if you start a new job, you’re laid off work or your partner dies.

You must report these changes to HM Revenue and Customs.