Working Tax Credit

Working Tax Credit is designed to top up your earnings if you work and you’re on a low income. It is one of the benefits being replaced by Universal Credit. Use this guide to find out whether you’re eligible for the benefit, what the income thresholds are, how much you’re entitled to and how to claim.

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.

Find out more about Universal Credit here.

If you’re already claiming Working Tax Credit, you will have to move to Universal Credit 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).

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.

What is 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.

Working Tax Credit is designed to top up your earnings if you work and you’re on a low income.

If you’re eligible, you can get it if you’re employed or self-employed.

You will get a basic element of £1,960 a year plus extra elements, depending on your circumstances, such as having a disability or paying for childcare.

You can’t claim Working Tax Credit if you already get Universal Credit.

Do I qualify for Working Tax Credit?

You can usually only make a new claim for Working Tax Credit if:

  • you or your partner qualify for Pension Credit.

Depending on your circumstances, you might be able to claim Working Tax Credit if:

  • you’re aged between 16 and 24 and have a child or a disability, or
  • you’re 25 or over and working a minimum number of hours.
Your circumstance Minimum number of working hours a week
Aged 25 to 59 30
Aged 60+ 16
Disabled 16
Single with one or more children 16
Couple with one or more children Usually at least 24 hours between you (with one of you working at least 16 hours)

Exceptions for couples with at least one child

You can claim if you work less than 24 hours a week between you and one of the following applies:

  • you work at least 16 hours a week and you’re disabled or aged 60 or above
  • you work at least 16 hours a week and your partner is getting certain benefits because of disability or ill health, is entitled to Carer’s Allowance, or is in hospital or prison.

Annual household income limits

Tax credits are tax-free and you don’t have to be paying National Insurance or tax to qualify.

When you apply, the Tax Credit Office will take into account your circumstances (and those of your partner or spouse) when deciding how much you’re entitled to.

If your annual household income is £6,420 or below, you’ll get the maximum amount for each Working Tax Credit element you qualify for.

This is called the ‘income threshold’ - anything you earn above this will reduce the amount you can get.

If you or your partner earns over a certain amount, you won’t be entitled to Working Tax Credit. This is called the annual household income limit.

The table below gives you a rough idea of the income limits for getting Working Tax Credit if you:

  • are over 25
  • don’t have a disability
  • don’t have any children.
Number of children Annual household income limit for 2018-19
None - single person Around £13,100
None - couple around £18,000

There are different income limits depending on your circumstances, for example, if you or your partner have a disability, or you have children.

You can see the full entitlement tables for tax credits at GOV.UK.

If you have dependent children, your annual household income limits might be higher and you might be entitled to Child Tax Credit.

Find out more in our guide to Child Tax Credit.

How much is Working Tax Credit?

Use GOV.UK’s Tax credits calculator to work out an estimate of how much you could get.

If you’re eligible, you’ll get a basic amount of £1,960 a year (known as the ‘basic element’).

You’ll get extra amounts (‘elements’) on top of this, depending on your circumstances.

The amount you get for each element depends on things like:

  • your income
  • how many hours you work
  • whether you have a disability
  • whether you have children
  • whether you pay for childcare.

The rates for the 2018 to 2019 tax year

Element Yearly amount
For a couple applying together or a single parent (the ‘couples and lone parent element’) Up to £2,010
If you work at least 30 hours a week (the ‘30 hour element’) Up to £810
If you work and are disabled (the ‘disability element’) Up to £3,090
If you’re severely disabled (the ‘severe disability element’) Up to £1,330
If you’re paying for registered or approved childcare (the ‘childcare element’) Up to 70% of your childcare costs

Working Tax Credit and help with childcare costs

If you 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 2018-19 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.

Leave, sickness and gaps in your employment

If you’re eligible, you can get Working Tax Credit for periods when you’re not working. For example, if you’re sick, on maternity leave or you’ve lost your job.

Depending on the circumstances, you can claim Working Tax Credit for a set period of time, if you qualify.

To qualify, you must:

  • have been in paid work
  • have worked the right number of hours before you went on leave or the gap happened
  • have got Statutory Sick Pay or an equivalent benefit if you were on sick leave.
Circumstance Period you get tax credits for
You lose or leave your job 4 weeks
You’re on maternity leave or adoption leave The first 39 weeks of your leave
You’re on paternity leave The period of your ordinary paternity leave
You’re on additional paternity leave Up to the equivalent 39th week of your partner’s leave
You’re off sick The first 28 weeks
You’re on strike The first 10 days
You’re laid off work 4 weeks
You’re suspended from work - for example, because of a complaint Usually the period of the suspension

If you don’t return to work at the end of this time off, call the Tax Credits Helpline on 0345 300 3900 and let them know.

How to claim Working Tax Credit

Call the Tax Credits Helpline:

  • Telephone: 0345 300 3900
  • Textphone: 0345 300 3909
  • Outside UK: +44 2890 538 192
  • Opening times: 8am to 8pm, Monday to Friday, 8am to 4pm Saturday, 9am to 5pm Sunday
  • Find out about call charges

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

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 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.

Other tax credits you might qualify for

Important

Child Tax Credit is also being replaced by Universal Credit

If you qualify for Working Tax Credit, have children and are on a low income, you might also be eligible for Child Tax Credit.

When you apply for Working Tax Credit, you’ll also be told whether you qualify for Child Tax Credit.

There’s no need to claim them separately.

Find out more about Child Tax Credit.

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