Am I Claiming the Right Tax Credits?
Tax credits are the system where you can get financial help from the government if you are earning less than a certain amount. However, it is a complex system with different types of credits, rules around them and systems to claim them. So how do you know if you are claiming the right tax credits?
To start with there are some general rules about qualifying for tax credits. You must be a UK resident and aged 16 or over.
For child tax credits, you either reside in or have the right to reside in the UK. You can sometimes qualify if you don’t live in the UK but are a resident of the EEA and work in the UK or are a Crown Servant posted overseas. You may also be an EEA citizen living abroad and receive a UK state pension or contribution-based Jobseeker’s Allowance.
Many people currently receiving tax credits are being moved to the new Universal Credit in July 2019 so the rules around this will then apply to any claims.
Tax credits as a couple
As a couple, you need to make a joint tax credits claim. This applies whether you are married, in a civil partnership or co-habiting.
Child tax credit
Child tax credits are for people with one or more child or qualifying a young person. You can find out more about what qualifies a young person for this on the government’s Child Tax Credit page. The payment is made directly to the person who is mainly responsible for caring for the child.
Working tax credit
Working tax credit is designed for people who are paid for work and expect to work for at least four weeks. Additionally, you need to be:
- Working at least 16 hours a week and aged 16 or above with responsibility for at least one child
- Work at least 16 hours a week and aged 16 or above and disabled
- Work at least 16 hours and week and aged 60 or above and have claimed certain benefits
- Aged 25 or over and work at least 30 hours a week
Normally, you don’t receive working tax credits unless you are working but there are a couple of exceptions. For example, if you are on statutory maternity pay or statutory sick pay, you may qualify.
If you are part of a couple, the payment will be made to the one working 16 hours a week or more. If you both do, then you can choose who receives it.
Claiming tax credits
You can apply for tax credits either online on the HMRC website or by calling into the local Tax Credit Office. This will help you find out if you qualify for any of the tax credits and if you do, you can then go through the process of applying for them.
If you use the phone to ring HMRC about the claim, you will need some information handy to provide to them. This includes:
- Your national insurance number
- How much you earned last year
- Details of any benefits you get
- Details of any childcare payments you get
- How many hours a week you work
If you need extra advice about whether to claim for tax credits, you can talk to HMRC or you can also get in touch with the Citizens Advice Bureau who can help you.
If you are receiving any type of benefit, it is really important to make sure the details that HMRC hold are always up to date and accurate. If anything changes that might affect your claim, it is best to get in touch with them to check.
Examples of details you definitely need to tell them about include:
- Change of status such as getting married, moving in with or out from your partner or leaving the UK for more than 8 weeks
- Change in how many hours you work each week whether this is increasing or decreasing
- Changes in your children’s circumstances such as if a child leaves home, your childcare costs go up or down or you start getting childcare vouchers
Don’t assume it won’t because if you are wrong, you can not only have to pay back any overpayment but could even get a big fine.