Working Tax Credit

Working Tax Credit is designed to top up your earnings if you work and are on a low income. However, it is being replaced by Universal Credit and most people now have to claim Universal Credit instead. Use this guide to find out whether you’re still eligible for the benefit, how Working Tax Credit is affected by Universal Credit and what happens if you are already getting it.

Universal Credit and Working Tax Credit

Most people will not be able to make a new claim for Working Tax Credit and will be asked to apply for Universal Credit.

There are no limits to the hours you can work on Universal Credit as there were with Working Tax Credits.

Find out more about Universal Credit here.

Who can still claim Working Tax Credit

Help to Save

If you’re on Working Tax Credit, check out the Help to Save account which gives you up to a 50% bonus from the government on your savings.

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

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

If you are already getting Working Tax Credit

If you’re already claiming Working Tax Credit, how and when you move depends on if you have to make a new claim because of a change in circumstances

Tax credits and a change in circumstances

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

  • losing a job
  • having a child
  • start working less than 16 hours a week.

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.

Working Tax Credit and help with childcare costs

If you’re getting Working Tax Credit, work at least 16 hours a week and pay for childcare, you might be able to claim the ‘childcare element’ of Working Tax Credit to help with up to 70% of your childcare costs:

  • if you’re in a couple, you need to be working at least 16 hours each to qualify
  • you can be eligible if you’re employed or self-employed

In most cases, you must use registered or approved childcare. This can include childminders, playgroups and nurseries.

Learn more about getting Help paying for childcare on GOV.UK.

How much can you get?

With the childcare element, you can get help with up to 70% of your childcare costs, up to certain maximum weekly limits.

The table below shows how much you could get in the 2019/20 tax year:

Number of children If you pay up to: You could get up to:
1 £175 a week £122.50 a week
2 or more £300 a week £210 a week

If you pay more than this for childcare, you will still only receive the maximum amount shown above.

If you qualify for the childcare element, you won’t necessarily get the full amounts.

How much you get will depend on:

  • your income
  • the hours you work
  • your childcare costs.

If you’re already claiming tax credits, call the Tax Credit Helpline to update your claim.

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 Credits Office will write to you to telling you what you need to do to renew your tax credits.

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 should call the Tax Credit Office on 0345 300 3900 to let them know.

Changes in your circumstances can affect the amount of money you get, or mean you have to make a new claim for Universal Credit.

Tax credits and income changes

Important

A significant income change might count as a change in circumstances, which would mean you will have to make a new claim for Universal Credit instead of tax credits.

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 £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 a 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 overpayments at a later date.

If your income goes down

If your income falls by £2,500 or more, you might be entitled to more tax credits, or be asked to claim Universal Credit.

Tell the Tax Credit Office as soon as possible about your change of circumstances.

If you are overpaid tax credits

If you are 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 are overpaid tax credits on the GOV.UK websiteopens in new window.

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