Tax Credits

CalculatorWhat exactly are tax credits and how do they work?

Tax Credits are a means tested benefit awarded to families with children and people who are working but on a low income.

Paid through Her Majesty’s Revenue and Customs Department (the old Inland Revenue); they are not paid automatically and a claim has to be made to find out if you are entitled to Tax Credits.

The amount paid is worked out using information based on your personal/family circumstances and household income.

To claim Tax Credits you have to fill in a claim form.  Call 0845 300 3909


There are several different elements to tax credits:

 - Working Tax Credit: is payable if you work at least 16 hours per week; there is a 30 hour premium if you are 25 and over and work 30 hours or more each week.

 - Child Tax Credit: you do not have to be employed to claim child tax credits but you do need to be responsible for child/children aged 0 to 16 or over 16 and attending full time education or training with an approved training body. If you look after a disabled child who receives Disability Living Allowance at the middle or high rate care component then there is a disabled child premium paid on top of your child tax credit entitlement; you would need to contact the Tax Credit Office for further advice.

 - Childcare Tax Credit: If you work 16 hrs or above each week and you pay for child care then you can claim the child care element of Tax Credits; you may be able to claim up to 80% of the costs.

 - The 50+ Tax Credit element: if you or your partner are aged 50 or over and work 16 hours or more each week or have been in receipt of unemployment benefits e.g. Job Seekers Allowance (JSA) for 2 years you may be entitled to claim.

 - The Disability Element: If you are disabled and working 16 hours or more each week you may be entitled to claim the Disability element of Tax Credits which replaced Disability Working Allowance; contact the Tax Credit office for further information.

Claiming some elements of tax credits bring additional help such as reduced sewerage and water charges; help with NHS costs; etc. There are other examples of help you might be able to access such as:-

Free School Meals

If you are entitled to Child Tax Credits but not Working Tax Credits, provided the award was based on annual gross income of £16,040 or less, you are eligible for free school meals for any child at school.

If you were receiving Working Tax Credits but are no longer entitled to because you have stopped working, you will be entitled to free school meals for your children, provided you are entitled to Child Tax Credits and have income of less than the threshold.

There have been changes made to free school meal entitlements and from 1 May 2009 (In England) and from 3 August 2009 in Wales, if your household receives Working Tax Credits in addition to Child Tax Credits but a member of the family has either stopped work or reduced their working hours to less than 16 hours a week within the previous four weeks, you will still be entitled to receive free school meals during this period.

It is always worth a chat with your local CAB or advice centre to ensure that you are claiming everything to which you and your children are entitled.

If you think you are entitled to claim any elements of Tax Credit try to ensure your income details are correct as if there are any discrepancies between what you earn and the figures you have given the Tax Credit Office it could lead to an overpayment of benefit which you may have to repay; if this does happen you need to seek advice from your local CAB/Advice Centre.

It is always worth visiting the Tax Credit website for further advice and guidance.

If there are any changes to your circumstances such as childcare costs, child leaving full time education; changes to your income etc. it is best to notify the tax credit helpline to check if the changes have any impact upon your claim.

We always recommend that you keep records of every correspondence with the Tax Credit system ie: note the date, time and name of the person who you are informing in case there are any problems in the future and it results in an overpayment.

If you would like to talk to other single parents about Tax Credits join in our online discussions about Managing Your Money.

If you have a specific problem with your Tax Credits, please contact our 1-2-1 confidential email advice service, who have many years of supporting single parents with benefit issues.

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