Claiming tax credits
Tax credits help to boost your household income and can be worth thousands of pounds each year. You might be able to claim Working Tax Credit if you’re working and on a low income and claim Child Tax Credit if you have children. This page tells you more about what tax credits are, how to apply for them and what to do if you’re overpaid.
- What are tax credits?
- Do I qualify for tax credits
- How much will I get in tax credits
- How to claim tax credits
- Tax credits and overpayments
- Tax credits and Universal Credit
What are tax credits?
Tax credits are payments from the government straight into your bank account.
There are two types – Child Tax Credit and Working Tax Credit.
Child Tax Credit
If you’re responsible for any children under 16, you could get Child Tax Credit.
You can also qualify if you have children aged 16 to 19 who are studying full-time in sixth form or at a further education college.
Changes to Child Tax Credit from April 2017
There are plans to change the way you claim Child Tax Credits starting in April 2017.
From this date, it is proposed that if you are making a new claim, support will be limited to the first two children (unless you have a multiple birth) and you would no longer be able to claim the family element.
Disabled children would be protected and you would still be able to claim the disabled child premium for any of your children who are eligible to get it.
If you are already claiming Child Tax Credits and you have more than two children, you wouldn’t be affected by the changes.
Working Tax Credit
Working Tax Credit is based on the hours you work and how much you earn.
It doesn’t matter whether you’re an employee or self-employed.
You don’t have to have children to qualify for Working Tax Credit, but if you do, you might be entitled to more.
Do I qualify for tax credits
How much will I get in tax credits
Read our guide to find out more about how much you could get in Child Tax Credit
Read our guide to find out how much you could get in Working Tax Credit
How to claim tax credits
To claim Tax Credits you’ll need to fill in form TC600.
You can get this form by:
- Completing in HMRC’s Tax Credit claim form request online, or
- Calling the Tax Credit helpline on 0345 300 3900 (textphone 0345 300 3909)
Tax credits and overpayments
Tax credits awards are estimates, which are finalised after you’ve renewed your claim each year.
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
If your income goes up by more than £2,500 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 that you have been overpaid tax credits.
You will 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 the bill, you must 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 overpayments at a later date.
If you are asked to repay tax credits and will struggle to pay, speak to the Tax Credit Office as soon as you can
If your income goes down
If your income falls you might be entitled to more tax credits.
You must tell the Tax Credit Office within 30 days if your income falls by more than £2,500 but it’s best to tell them of any changes to make sure you get the extra money as soon as possible.
Call the Tax Credit Helpline on 0345 300 3900 to let them know about any changes to your circumstances.
Tax credits and Universal Credit
You can continue to make new claims for tax credits unless you’re asked to make a claim for Universal Credit.
You can’t claim tax credits and Universal Credit at the same time.
Tax credits are being phased out and replaced by Universal Credit.
Universal Credit is a single monthly payment and includes a standard allowance plus other elements - for example for children, childcare, housing and caring.
The amount you get will depend on your circumstances.
If you’re already claiming tax credits you probably won’t be affected until later on.
At the moment, you only need to claim Universal Credit instead of tax credits if:
- You start living with a partner who already receives Universal Credit.
- You live in one of the areas where Universal Credit is being introduced and you lose your job.
From April 2017, if you are making a new claim for Universal Credit, support will be limited to the first two children (unless you have a multiple birth) and the first child premium will no longer be available.