Child Tax Credit and Working Tax Credit – the basics!

Tax building blocks

Tax building blocksTax credits provide families with important extra income.  It is easy to check what you are entitled to and put in a claim.  Just remember to let HMRC know if your circumstances change.


Child Tax Credit

Child Tax Credit is paid to families with children, whether they are working or not.  You don’t have to have made any National Insurance Contributions to get Child Tax Credit, and the additional income won’t affect any other benefits you receive.

Child Tax Credit is income-based and the amount you get depends on your circumstances.  It will be higher or lower based on the size of your family, your income and other factors.

Child Tax Credit was previously available to families with household incomes of up to about £40,000.

Changes in the Budget mean that those with one child can in most cases only claim if they earn less than £25,000, while those with two children are only usually eligible if they earn less than £30,000.

However entitlements vary – the easiest way to find out how much child tax credit you can get is to use the HM Revenue & Customs Tax credits calculator.

Read How much child tax credit am I entitled to? to find out more.

Working Tax Credit

Working Tax Credit is paid to people in work who have a low income.  It’s available to families with and without children.

If you’re responsible for children you need to be aged at least 16, and work the following hours to get Working Tax Credit:

  • If you’re a single parent, you need work of at least 16 hours a week.
  • If you’re in a couple, your joint working hours need to be at least 24 a week, with one of you working at least 16 hours a week.

There are also special circumstances which mean some couples who don’t work 24 hours per week may also get Working Tax Credits. Find out more on this page of HMRC’s website.

If you don’t have children, you must be 25 or over, and you or your partner must work at least 30 hours each week.

Both employed and self-employed people can claim Working Tax Credit – but unpaid work isn’t taken into account.

Working Tax Credit can also help with the costs of childcare, depending on your circumstances.  You can only claim for childcare which is registered – so payments to friends or relatives who aren’t registered to provide childcare won’t count.

The amount of Working Tax Credit you receive depends on your income and other circumstances, including your childcare costs.  You can use the HMRC online calculator to work this out.

How do I claim?

You can claim Child Tax Credit and Working Tax Credit on the same form.  Using the information you give them, HMRC will work out which of the tax credits you are entitled to and the amount you will get.

You can request the forms from the Jobcentre Plus or by calling the Tax Credits helpline on 0845 300 3900.  You can’t apply online.

You will need to complete a review form each year to ensure that your Tax Credit payments continue.  The forms are generally sent out to everyone who claims Tax Credits between April and July of each year.

It is important to contact the HMRC if your circumstances change during the year because this could affect the amount paid to you.

Make contact if you become single or part of a couple, or if the number of children you are claiming for changes.  You should also make contact if your childcare costs are reduced or stopped.

Other benefits

Take a look at MyFamilyClub’s easy 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 the Sure Start Maternity GrantMaternity Pay, and help with healthcare costs.

Maternity Action also has a great information sheet on Money for Parents and Babies.