There are two types of tax credits:-

• Child Tax Credit
• Working Tax Credit

Unlike other benefits, tax credits are administered by the Her Majesty’s Revenue & Customs (HMRC) rather than the Department for Work & Pensions. Most benefits are usually calculated as weekly amounts but the HMRC assess your entitlement to tax credits over an annual basis from April-March each year.

You can find out if you qualify for Tax Credits by contacting the Tax Credit Helpline on 0845 300 3900 (textphone 0845 300 3909), which is open from 8am to 8pm seven days a week (except Christmas Day, Boxing Day and New Year's Day. Alternatively). You can complete a Tax Credit questionnaire at www.direct.gov.uk.

Child Tax Credit

Child Tax Credit (CTC) is an income related benefit for people who are responsible for children or young people. It is paid irrespective of whether someone is working or not.

CTC replaced the previous Children’s Tax Credit and the increases for children in the old Working Families Tax Credit. It also replaces the child allowances that used to be included in Income Support and income based Jobseeker’s Allowance.

To qualify you need to be at least 16 years old and you or your partner must be responsible for a child or a young person aged over 16 but under 20 and in full-time non-advanced education or qualifying unwaged training.

The maximum amount of CTC is calculated by looking at how many children there are in the family and whether any of them have disabilities.

If you receive Income Support, Income-Related ESA, income based Jobseeker’s Allowance or Pension Credit you will get the maximum amount of CTC.

In all other cases the HMRC look at the income that you and your partner have and compare this to a threshold figure. If your income is below this threshold figure you receive maximum CTC if it is above then your maximum CTC is reduced by a percentage of the excess.

Working Tax Credit

Working Tax Credit (WTC) is an income related credit for working adults.
To qualify you need to meet one of the following conditions:-

• You work 16 hours or more a week and

• you have responsibility for a child or young person OR
• you have a disability that puts you at a disadvantage of getting a job. (There are a number of ways to meet this criteria including the fact that you would find it hard to work an 8 hour day or a five day week because of your condition or because of your mental health you receive regular treatment from a doctor or consultant) and you receive or were recently in receipt of certain benefits
• You qualify for the 50-plus element (This is for people aged 50 or over who are returning to work and who had usually been receiving benefits for at least 6 months prior to returning to work again).

• You work 30 hours or more a week and are aged over 25

The amount of WTC you are entitled to depends on whether you are single with no dependents; a lone parent or a member of a couple; the hours you work; whether you or your partner are disabled; whether you are over 50 and returning to work; and whether you have any eligible child care costs.
 
To claim tax credits contact the Tax Credit Helpline on 0845 300 3900 or get a claim form from a Jobcentre Plus office.

CTC and any childcare costs of the WTC payment are usually paid to the main carer. WTC is usually paid to the person who works directly into their bank account. If both members of a couple work then they must decide who will receive payments.