Child Tax Credit

Child Tax Credit is a benefit that helps with the costs of raising a child if you are on a low income. However, it is being replaced by Universal Credit and most people who need help with these costs now have to make a claim for Universal Credit instead. This page tells you more about how Child Tax Credit is affected by Universal Credit, who is still able to claim it and what to do if you are already getting Child Tax Credit.

Universal Credit and Child Tax Credit

Child Tax Credit is one of the six benefits being replaced by Universal Credit.

This means most people can no longer make a new claim for Child Tax Credit and have to apply for the child element of Universal Credit instead.

On Universal Credit you may be able to claim back up to 85 per cent of eligible childcare costs up to a maximum of £646.35 for one child, or £1,108.04 for two or more children. This is compared to the 70 per cent you could claim for childcare costs on Child Tax Credit.

To get the childcare costs element, you must be in paid work, or have an offer of paid work that is due to start before the end of your next UC monthly assessment period.

If you’re in a couple your partner must also be in paid work, unless they can’t provide childcare because of a limited capability for work or they are caring for a severely disabled person.

You can claim the child element of Universal Credit for all qualifying children born before 6 April 2017.

If your children were born on or after 6 April 2017, you will only be able to claim for the first two unless you had a multiple birth or in other limited exceptions.

Find out more about Universal Credit here.

Who can still claim Child Tax Credit?

You can make a new claim for Child Tax Credit if you or your partner are getting the Severe Disability Premium.

Find out more about claiming Child Tax Credit on the GOV.UK website.

If you’re already claiming Child Tax Credit

You will have to move to Universal Credit at some point before March 2023. How and when you move depends on if you have to make a new claim because of a change in circumstances, or are asked to claim Universal Credit by the Department for Work and Pensions (DWP).

If you have a change in circumstances

You must tell the Tax Credit Office within 30 days if you have a change of circumstances, such as:

  • losing or getting a job
  • having a baby
  • a partner moving in or out.

This might mean you will have to make a new claim for Universal Credit. The Tax Credit Office will tell you what you need to do.

Call the Tax Credit Helpline on 0345 300 3900 to let them know about any changes to your circumstances.

Keeping your tax credits up to date

You need to renew your tax credits claim by 31 July every year if you want to keep getting them.

The Tax Credit Office will write to you telling you what you need to do to renew your tax credits. You should get your pack in May or June and the deadline to respond is usually 31 July each year. If you don’t get your renewal pack, you’ll need to contact the Tax Credit helpline as soon as you can to make sure you can meet the deadline.

If you miss the deadline

  • You’ll be sent a ‘statement of account’, telling you your tax credits will stop, and any provisional payments you receive will be classed as an overpayment and will need to be repaid.
  • You should contact the Tax Credit Office within 30 days of the date on your statement of account. A renewal can then be processed to reinstate your claim back to 6 April.
  • If you contact the Tax Credit Office later than 30 days after you get your statement of account, you’ll only be able to have tax credits reinstated where you can show you have ‘good cause’ for renewing late. You’ll need to contact them by 31 January. Your claim will then be treated as if it was made on 6 April.
  • If your claim is not reinstated, you can make a fresh claim but this can only be backdated 31 days, and you’ll need to repay any overpayments.

When you do renew, make sure you use the official HMRC phone number, website and correspondence as around the deadline time there is often an increase in fraudulent activity which often targets those likely to be reapplying.

You can manage and renew your tax credits online at Gov.uk or by calling the Tax Credit Office on 0345 300 3900*, but this line can get very busy in the days leading up to the deadline, so give yourself plenty of time.

There is also online help available to support you when you’re renewing online, including a webchat facility to help try and answer queries around renewing.

In addition, there’s a special team to support the most vulnerable customers who cannot go online. People HMRC know need special support will be proactively contacted by the support team.

You should inform them if your circumstances change at any time during the year, for example, if your income changes, your child leaves home or you move house. You might have to claim Universal Credit instead.

Tax Credits and income changes

The amount by which your income can change before you have to tell the Tax Credit Office is £2,500.

This is called the income disregard.

If your income goes up by £2,500 or more and you delay telling the Tax Credit Office or wait until the next time your claim is due to be re-assessed, you might find you have been overpaid tax credits.

You’ll be asked to pay this extra money back, either by reducing your future tax credits or by direct payments if your tax credits have stopped.

To avoid this bill, it’s even more important to tell the Tax Credit Office within 30 days of when you get the extra money.

It’ll be easier for your tax credits to be adjusted, and decrease the chance you’ll be chased for over-payments at a later date.

It also works the other way. If your income falls by £2,500 or more, you might be entitled to more tax credits.

If you’re asked to repay tax credits and will struggle to pay, speak to the Tax Credit Office as soon as you can.

Find out more about what to do if you’re overpaid tax credits on the GOV.UK websiteopens in new window.

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