The Government's official literature claims that nine out of ten families with children are eligible for Tax Credits (as are people on low income), but what are Tax Credits and how do you go about claiming your entitlement?
What are Tax Credits?
In essence, Tax Credits are payments from the Government designed to provide extra financial support for people with children (Child Tax Credit) or those on low incomes (Working Tax Credit).
Who is eligible for these payments?
Whether you are eligible will depend on your circumstances – specifically whether you have dependent children or young adults living with you, and whether your total family income falls below a certain level. To find out if you are eligible, you can visit this page and complete the quick questionnaire.
NOTE: If you are self employed, your income figure is your annual net profit, which will be lower than your total income, so remember to use this figure when checking your eligibility.
In general, any family earning a total annual income of more than £58,000 is unlikely to qualify – but it is still worth checking. If the calculator says you are not eligible, you can call the Tax Credit Helpline on 0845 300 3900 begin_of_the_skype_highlighting 0845 300 3900 end_of_the_skype_highlighting or textphone 0845 300 3909 begin_of_the_skype_highlighting 0845 300 3909 end_of_the_skype_highlighting to make sure.
If I am eligible, how much might I get?
Again, a lot depends on your circumstances – for instance the closer your income gets to the £58,000 threshold, the less you will get. However, according to Directgov, a family with three children and earning about £25,000 a year would receive around £87 a week in Tax Credits.
I live with my partner, do we each claim separately?
No, if you are married or living with your partner you must make a joint claim. If your claim is successful, you must then decide which of you will receive the payments.
How are the credits paid?
Tax Credits are paid directly into your bank, building society, Post Office or National Savings account, provided it accepts Direct Payment, either weekly or monthly.
How do I go about making a claim?
If you have never applied for Tax Credits before, you must make a new application. To do this, you will need to order claim form from the Tax Credit Office, by calling 0845 300 3900 begin_of_the_skype_highlighting 0845 300 3900 end_of_the_skype_highlighting or textphone 0845 300 3909 begin_of_the_skype_highlighting 0845 300 3909 end_of_the_skype_highlighting (8am to 8pm).
In order to complete the form, you will need the following information:
- Your National Insurance number
- Your Child Benefit reference number (if you have one)
- Your P60 or wage slips for the last tax year if you were employed
- Your income for the last tax year and your unique tax reference number (UTR) if you were self-employed
- A list of any benefits you claim
- Any other income you get like savings interest, pensions or rent
- Any childcare payments you make if you use a registered or approved provider
- The bank or building society account you want your Tax Credits paid into
It is important to claim Tax Credits as soon as you become eligible, as any payments you are owed will only be backdated by three months. That is, if you claim six months after you become eligible, you will only get credits for the previous three months.
I have applied before but think my circumstances have changed, making me eligible, what do I do?
If you have claimed before, you do not need to apply again when your circumstances change. Simply call the Helpline (0845 300 3900 begin_of_the_skype_highlighting 0845 300 3900 end_of_the_skype_highlighting or textphone 0845 300 3909 begin_of_the_skype_highlighting 0845 300 3909 end_of_the_skype_highlighting) and tell an advisor of your changed circumstances – you will need your National Insurance number to hand when you call. The advisor will update your details there and then and advise as to your eligibility and what will happen next.
NOTE – If you already claim Tax Credits you must tell the Tax Credits Office of any changes to your personal circumstances (e.g. children leaving home, your income going up or down, change of bank etc) immediately. Some of these changes will affect your eligibility or the amount you receive – if you receive too much, you will have to pay it back in the end.
I already claim Tax Credits, do I need to renew my claim?
If you already claim Tax Credits you will be sent a renewal pack by the Tax Credit Office between April and June. The pack will include instructions as to what you need to do to renew your claim – which you must do by the 31st July. Until you renew (or until 31st July), you will receive provisional payments based on the previous year’s award.
However, if you fail to renew by the 31st July, your provisional payments will stop and your award will be cancelled – you will then be asked to pay back any provisional payments you have received. If your payments are stopped and your award cancelled for this reason, you still get a final chance – your Tax Credit payments will be re-instated if you contact the Tax Credit Office within 30 days of your payments being stopped.
NOTE - When you renew your claim you must tell the Tax Credits Office of any changes to your personal circumstances (e.g. children leaving home, your income going up or down, change of bank etc) immediately. Some of these changes will affect your eligibility or the amount you receive – if you receive too much, you will have to pay it back in the end.
