Welfare Rights on the Net

Working Tax Credit

What is it?

You can apply for two tax credits, Child Tax Credit and Working Tax Credit.

The general rule is that to qualify for tax credits you must be aged 16 or over and usually live in the United Kingdom.

Couples must make a joint tax credits application. If you are part of a couple, you cannot decide to apply as a single person.

Working Tax Credit is for people who are employed or self-employed (either on their own or in a partnership), who usually work 16 hours or more a week, and expect to work for at least 4 weeks and who are aged 16 or over and responsible for at least one child, or aged 16 or over with no children but who are disabled, or aged 25 or over and usually work at least 30 hours a week.

Working Tax Credit is paid to the person who is working 16 hours or more a week. Couples, if both of you are working 16 hours or more a week, you must choose which one of you will receive it. You should not receive Working Tax Credit if you are NOT working 16 hours at the date of claim and should NOT keep it if you stop working less than 16 hours after being awarded it, although new rules form January 2008 allow it to be paid for four weeks after you stop working.

Child Tax Credit is for people who are responsible for at least one child or qualifying young person. Child Tax Credit is paid if you work or not, and is paid direct to the person who is mainly responsible for caring for the child or children. If you are a lone parent you will receive the payment.

As part of Working Tax Credit you may qualify for help towards the costs of childcare. If you receive the childcare element of Working Tax Credit, this will always be paid direct to the person who is mainly responsible for caring for the child or children, alongside payments of Child Tax Credit.

The amount of tax credits you receive will depend on your annual income for the previous year. You are allowed to earn over this estimated amount by Ł25,000 without this extra amount effecting the on-going award.

However anything over this amount will reduce your entitlements for this year. It will be noticed when the Inland Revenue re-calculate your next award from next April, this could result in an overpayment.

Please check your entitlements here.

DISCLAIMER - Although every effort is made to ensure the information on these pages is accurate and up to date, we cannot be held liable for any inaccuracies and their consequences. The information should not be treated as a complete and authoritative statement of the law. If you wish to know more about your benefit rights, you should seek independent advice.