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 adults, while the Working Tax credit mainly serves people in low-paid work.
- Both types of tax credit are paid on a weekly or a monthly basis, depending on what suits you. The amount is paid directly into your bank, building society or Post Office account.
Child tax credit - how do I qualify?
You are eligible to claim for Child Tax Credit if you are a parent/full time carer and responsible for at least one child under 16 or a young person in full-time education/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 Benefit is means-tested. So, if you make a claim then 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 £2,085 each year for every junior member of your family (from April 2008-9);
- Additions for children with disabilities.
The amount you receive will depend on your income and will be paid directly to the parent/carer.
How do I find out if I can claim?
- Call the Tax Credit Helpline on 0845 300 3900.
- 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 number of tax credits your receive. Call the helpline if you have any change in terms of your household arrangements, number of children or work arrangements.
Working tax credit - how do I qualify?
You're 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; or
- 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 and work 30 hours a week. There are income limits based on your personal situation which cannot be exceeded.
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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