How to claim working tax credit
What is it?
Working Tax Credit is a payment from HM Revenue and Customs to top-up the earnings of people who are low paid and live in a low income household, whether or not you are responsible for children.
From April 2015, self-employed Working Tax Credit claimants will need to register their self-employment with HMRC for Self Assessment purposes and provide a Unique Tax Reference number in order to be able to claim. Those declaring income less than the equivalent of working 24 hours a week at the National Minimum Wage will also be required to provide evidence to HMRC that the work they are undertaking is genuine and effective.
Working Tax Credit can also provide help with childcare costs. Payments are means tested, so the more you earn the less you receive.
Can I get it?
You can get Working Tax Credit if you are at least 16 years and fall into one of the groups below. Note that from April 2012 Working Tax Credit rules are stricter than was previously the case for couples with children.
Entitlement group 1. Lone parents working 16 hours or more a week
Entitlement group 2. Couples with dependent children where:
a. One member is working 24 hours or more a week, or
b. Both members are working and between them work a total of 24 hours or more a week, as long as one is working 16 hrs or more a week, or
c. One member is working 16 hours or more a week and the other is 'incapacitated' (for more information see HMRC's guidance on the meaning of incapacitated), or
d. One member is working 16 hours or more a week and the other is in prison, or in hospital, or
e. One member is working 16 hours or more a week and the other member is entitled to Carers Allowance.
Entitlement group 3. Single or couples (with or without children) where the working person is aged 60 or over and working 16 hours or more a week.
Entitlement group 4. Single people or couples (with or without children) where at least one of the working people works 16 hours or more a week and has a physical or mental disability that puts them at a disadvantage in getting a job and who is currently receiving or has recently received some form of disability benefit. More information is available on Working Tax Credit disability element.
Entitlement group 5. Single people or couples without children where one or both are working but at least one of the working people is aged 25 or over and working 30 hours or more a week.
How much is Working Tax Credit
As with child tax credit, WTC is calculated using "elements". You get whichever elements apply to you and the amount of WTC you actually end up with may be reduced after your income is taken into account. If your income is more than £6,420, this will affect the amount of WTC you can get. Your maximum entitlement to tax credits will be reduced by a percentage of the income you receive over the threshold.
The elements and the yearly amounts from April 2014 are:
The elements and the yearly amounts from April 2015 are:
How do I claim?
Tax credits are administered by HM Revenue & Customs. You can make a claim or report a change of circumstance by calling the helpline on 0345 300 3900 or textphone 0345 300 3909. Lines are open every day from 8.00 am to 8.00 pm. If you have not already applied for tax credits your claim can only be back-dated three months.
You can make a claim for Working Tax Credit providing you have accepted an offer of a job and that job is due to start within the next seven days. The work must be expected to last for at least four weeks from the time of making the claim.
If you are already claiming tax credits you need to renew your award annually. You may also need to tell HM Revenue & Customs about changes during the year - for more information see changes of circumstance.
If you are already receiving tax credits please note that you may be subject to an adjustment from previous years. To find out more see tax credit overpayments.