Tax credits can be a great help financially, especially if you have lots of mouths to feed at home. However, many people miss out because they fail to claim their full entitlement.
Here, we explain who qualifies for working tax credit and how to ensure that you receive the correct amount.
Who qualifies for working tax credit?
If you work, but are on a low income, you may well qualify for working tax credit payments.
The amount you receive is based on the hours you work and get paid for, or expect to be paid for. And you can claim whether you're an employee or a self-employed person.
What's more, if you are also responsible for at least one child or young person, you can often get the child tax credit on top.
How much can I get?
Your working tax credit entitlement depends on your income. So the lower your income, the more tax credits you can get.
You should, for example, qualify if you are single without children and earn less than £13,000 or if you and your partner have two children and earn less than £32,200.
Income is not the only deciding factor, though. The number of children you have living with you, the amount you pay for childcare and whether you have a disabled child can also have an impact.
How can I make a claim?
If you are married, in a civil partnership or living with a partner, you will usually need to make a joint claim for working tax credit.
Otherwise, you can make a claim as a single person. Either way, the easiest way to get your claim underway is to call the Tax Credit Helpline on 0345 300 3900.
How are tax credits paid?
Tax credits are paid directly into your bank account either weekly or every four weeks. If you are making a new claim, your payments will usually run from the date of your claim to the end of the tax year.
Consequently, if you make a claim this month, for example, your payments will be worked out from that date until 5 April, 2013.
Anything else I should know?
Changes to your day-to-day life such as starting a new job, splitting up with a partner or having a baby can make a big difference to the tax credits you receive.
You must inform the government – either by calling the Tax Credit Helpline or by writing to the Tax Credit Office, Preston, PR1 4AT– as quickly as possible of any such changes.
In particular, make sure you tell the tax office within one month if any of the following happens:
- Your status changes: you get married, move in with a partner or leave the UK for longer than eight weeks.
- Your working hours change: especially if they drop or you stop working.
- Your childcare arrangements change: such as your childcare costs going down, you start receiving childcare vouchers or a child leaves home.
Otherwise, you could end up missing out on tax credit payments, or receiving money that you will have to pay back to the government in the future. You could even face a fine.
Each year during April, May or June, the Tax Credit Office will also write to you asking you to check your personal information and confirm the income you received during the last tax year.
This is known as 'renewing' your tax credits claim and must be done by 31 July each year to allow the Tax Credit Office to set your payments for the year ahead.
Take a look at MyFamilyClub’s guide to benefits for a simple break-down of what other benefits you may be entitled to. You might also want to check out our simple guides to Child Benefit, the Sure Start Maternity Grant, Maternity pay, and help with healthcare costs.