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Working Tax Credit

Working Tax Credit is money provided to boost the income of working people who are on a low income.

1. What is Working Tax Credit?

Working Tax Credit is being replaced by Universal Credit.  Please go to ‘Can I get Working Tax Credit?’ for information on who can still claim.

Working Tax Credit is money provided to boost the income of working people who are on a low income. It does not matter whether you are working for someone else or are self-employed.

Working Tax Credit counts as income when working out your entitlement to most other means-tested benefits.

You can’t claim Working Tax Credit if you’re getting Universal Credit.


Applies to: England, Wales, Scotland and Northern Ireland

Age rules: You must be 16 or over, but in some circumstances you must be 25 or over

Type of benefit: Means tested

Taxable: No

Administered by: HM Revenue and Customs (HMRC)

 

Updated: July 2019
 

2. Can I get Working Tax Credit?

Working Tax Credit and Universal Credit

Working Tax Credit is being replaced by Universal Credit.  You will only able to get Working Tax Credit in the situations listed below.  Otherwise, you won't be able to make a new claim for tax credits. Use our calculator to see what benefits you might be able to get. 

If you are on Working Tax Credit and your situation stays the same, you won’t have to claim Universal Credit, at present.  The government started transferring a small number of people over to Universal Credit in July 2019 and it aims to complete this process by December 2023.

Can I get Working Tax Credit?

You can only get Working Tax Credit in the following situations:

  • You are getting tax credits (Working Tax Credit or Child Tax Credit) at present, unless you claim Universal Credit, or
  • You are getting a Severe Disability Premium.

In addition:

You and/or your partner must work full time, though this means a different number of hours per week for different people:

  • Unless you satisfy any of the special conditions below, you will need to be over 25 years old and will need to work at least 30 hours per week,
  • If you are single and are responsible for a child or qualifying young person, you will need to be over 16 years old and will need to work at least 16 hours per week.
  • If you live with a partner who gets ESA, PIP, DLA or Attendance Allowance and you are responsible for a child or qualifying young person you will need to be over 16 years old and will need to work at least 16 hours per week
  • If you live with a partner who gets Carer’s Allowance or who is in hospital or in prison, and you are responsible for a child or qualifying young person, you will need to be over 16 years old and will need to work at least 16 hours per week
  • If you have a disability which means you can get a disability element, you will need to be over 16 years old and will need to work at least 16 hours per week
  • If you are over 60 years old you will have to work at least 16 hours per week.

If your hours are not the same every week or you need help to calculate how many hours you work, see our Working hours guide.

What happens to my Working Tax Credit if I start a new relationship?

If you claimed tax credits as a single person and you later have a partner who joins your household, you will have to close down your single claim for tax credits. You won’t be able to make a new claim for tax credits. If you still want the help tax credits were providing you will need to get it through Universal Credit. This does not apply if you get a Severe Disability Premium on your existing benefits as a couple. You can use our Benefits Calculator to check whether you would get a Severe Disability Premium on your benefits if you were a couple.

What happens to my Working Tax Credit if I separate from my partner?

If you made a joint claim for Tax Credits as a couple and you later separate, you will have to close down your joint claim for tax credits.  You won’t be able to make a new claim for tax credits. If you still want the help tax credits were providing you will need to get it through Universal Credit. This does not apply if you get a Severe Disability Premium on your existing benefits.

 

Updated: July 2019

3. Can I get help with Childcare through Working Tax Credit?

If you are already getting tax credits, you may be able to get help with your childcare costs through your tax credits.

You can only get help with the costs of childcare provided by an approved childcare provider.

The Childcare Element of Working Tax Credit is for:

  • Single people who work at least 16 hours a week; or
  • Couples who both work at least 16 hours a week; or  
  • Couples where one works at least 16 hours a week and the other is getting ESA, PIP, DLA or Attendance Allowance; or
  • Couples where one works at least 16 hours a week and the other is entitled to Carer's Allowance; or
  • Couples where one works at least 16 hours a week and the other is in hospital or in prison (serving a sentence or remand in custody).

You can get up to 70 per cent of what you pay in childcare, as long as your childcare costs are not more than:

  • £175 per week for one child
  • £300 per week for two or more children.

If your childcare costs more than this, you will be treated as if your chilcare costs this amount when working out the Childcare Element of your Working Tax Credit.

If you get childcare vouchers from your employer, you must deduct these from the amount of your childcare costs when claiming the childcare element of tax credits. Some people will be better off claiming tax credits with the childcare element rather than childcare vouchers.  You can check this using the government's childcare calculator.

 

4. How much Working Tax Credit will I get?

It is complicated to work out how much Working Tax Credit you can get so we suggest using the Turn2us Benefits Calculator which can calculate how much you may be entitled to.

Your maximum entitlement is made up of different parts based on your personal circumstances, for example:

  • A basic element    

  • A lone parent element

  • A couple element

  • A Working Tax Credit childcare element

  • An element for working 30 hours or more per week

  • Disability elements

  • Severe Disability element

You may not get your maximum entitlement if you have other income. Savings do not affect your claim but interest from savings is included in your income.

Benefit Cap

Getting Working Tax Credit means you won't be affected by the Benefit Cap which limits the total amount in some benefits that working-age people can receive.


How will I be paid Working Tax Credit?

Working Tax Credit will be paid directly into your Bank, Building Society or Post Office account or by Simple Payment if you are unable to open or manage one of these or a similar account.

Working Tax Credit is usually paid every four weeks but you can choose to have it paid weekly by asking HMRC to change your payments.

Working Tax Credit and other benefits

Working Tax Credit counts as income when working out your entitlement to most other means-tested benefits.

 

Updated: July 2019

5. How do I claim Working Tax Credit?

Most people cannot make new claims for tax credits. Read our information about who can claim tax credits before making a claim.

If you are making a new claim for tax credits because you get a Severe Disability Premium, get a claim form by phoning HM Revenue and Customs (HMRC) Tax Credits Helpline. You will need to explain that you are making a new claim because you get a Severe Disability Premium and so cannot claim Universal Credit.

  • Telephone: 0345 300 3900
  • Textphone: 0345 300 3909

If you are already claiming tax credits and you need to change your claim (for example you already get Child Tax Credit and want to claim Working Tax Credit), call HMRC on the Tax Credits Helpline or manage your Tax Credits online using the Manage your Tax Credits online section of the Gov.UK website. You should also contact HMRC if you need to tell them of a change of circumstance.  You can report most changes through the tax credits online service.

You have to renew your claim by 31 July every year. If you do not renew it, your Working Tax Credit may stop. See the Gov.UK website for more information on renewing tax credits

What documents will I need to claim Working Tax Credit?

You will need:

  • Your national insurance number
  • Proof of who you are, for example a birth certificate or driving licence.
  • Proof of your annual income for the previous tax year, for example bank statements or pay slips
  • Your partner's details if they live with you (including income details for the previous tax year).

When will my Working Tax Credit claim begin?

Your Working Tax Credit claim usually starts on the day that your completed form is received by HMRC. It is important to get your claim made quickly so you don't lose out. 

You may be able to get Working Tax Credit backdated for up to 31 days. Some claims are backdated automatically but in some cases you have to request backdating in writing. The notes that you get with the claim form will tell you if you need to include a letter with your claim form.

Change of circumstances

Working Tax Credit is paid on a year by year basis but it is very important to tell HMRC about changes during the year which could affect the money you get. You must tell them about some changes within one month.

See the Gov.UK website for more information about changes that affect tax credits

HM Revenue and Customs also have a digital service for tax credits customers that allows people to check their next tax credits payment details online and to report most changes of circumstances.

 

Updated:  July 2019
 

6. How do I challenge a Working Tax Credit decision?

If you believe the decision about the amount of your tax credit award is wrong, for example due to incorrect information being used, you can usually ask for it to be looked at again known as a 'mandatory reconsideration'. If you still disagree with the further decision you can then appeal to an independent tribunal.

The time limits are strict, you will usually be given 30 days to challenge a decision, so it is important to seek advice and act quickly.

Further information on Challenges and complaints

 

Reviewed: August 2017