Tax credits

Tax credits overview

There are two tax credits – child tax credit and working tax credit.

You can get one or both of them, depending on your household circumstances. There are different qualifying conditions for working tax credit and child tax credit but you only make one claim.

• Working tax credit is paid to people who work and are on a low income – it does not matter whether you are an employee or self-employed. You do not need to have children to get WTC.
• Child tax credit is paid to people who have children. It is paid in addition to child benefit and you do not have to be working to get it.

How tax credits work

The amount of tax credits you get depends on a number of factors including the total amount of taxable income you and your partner have (income for the current year and previous year can be relevant for tax credits); whether you, your partner, or your children have a disability or long-term health problem; the number of hours you work; and the amount you pay for childcare.

You must also meet residence and immigration tests.

Tax credits are generally considered to be a benefit, but unlike other social security benefits, they are calculated as an annual amount and paid in weekly or monthly instalments during the tax year (6 April in one year until 5 April the next year). HM Revenue & Customs (HMRC) deals with tax credits.

New claims for tax credits

Universal credit is replacing both working tax credit and child tax credit. Now that universal credit is available in all areas of the UK, HMRC say it is no longer possible to make brand new tax credit claims and most people need to claim universal credit or pension credit instead. The only exception to this is for certain people who are granted refugee status. Currently people who have reached their state pension credit qualifying age are generally expected to claim pension credit for support, which now also includes elements for children. Most people who are part of a mixed age couple are only able to claim universal credit, although there is one exception to this.

Existing tax credit claimants will be asked to move to either universal credit or pension credit depending on their circumstances. The move to universal credit is expected to be complete by the end of the 2024/2025 tax year.

  Anyone who makes a claim for universal credit who is already claiming tax credits will have their tax credit claim terminated and it is unlikely they will be able to claim tax credits again. There is information about how universal credit affects people who are already claiming tax credits on our moving to universal credit page.

  If you already get working tax credit and want to claim child tax credit or vice versa, this does not count as a brand new claim and you will not need to claim universal credit. You can simply phone the tax credit helpline on 0345 300 3900 or report the change via your Personal Tax Account. If you already claim tax credits, you can continue to renew your claim in the usual way until you move to universal credit.

The main conditions for tax credits

There are some basic conditions that apply to both working tax credit and child tax credit. These are age, residency and immigration conditions. To qualify, you must:

• be aged at least 16 years old (although some people will need to be older to claim working tax credit).
• be ‘in the UK’. For working tax credit this means you must be present and ordinarily resident in the UK. For child tax credit you must be present, ordinarily resident and have a right to reside. There is more about the residence conditions on the GOV.UK website.
• not be subject to immigration control, but there are some exceptions to that rule.

Joint or single claims

If you are married or in a civil partnership, then both you and your partner must claim together in a joint claim, even if you are temporarily living apart. You must also make a joint claim if you are living with someone as if you were married or civil partners. You are jointly responsible for the claim.

If you do not have a partner or spouse and are not living with someone as if you are married or in a civil partnership, then you can make a single claim.

If you are married or in a civil partnership, you can only make a single claim if you are legally separated or separated in circumstances that are likely to be made permanent.

HMRC may investigate your claim. If you have made a single claim and HMRC have any evidence from their systems or from a credit reference agency that suggests another person is using your address or there are financial links with another person then they may write to you asking for information from you because they think you are living with another person. You can find out more about these investigations on our Revenuebenefits website for advisers.

It is important that you make the correct claim, or if you have a claim already it is important you tell HMRC if your relationship circumstances change otherwise you may be left with a large overpayment. There is more information about repaying an overpayment debt due to relationship changes in our tax credit overpayment section.

Leaving the UK for a short time

Normally, you need to be present in the UK to claim tax credits. But if you (or your partner) go abroad for up to eight weeks at a time, HMRC will treat you as if you are still in the UK, providing you intend your visit abroad to be temporary. Temporary means at the outset, you expect it to last less than 52 weeks.

The eight-week period can be extended to a maximum of 12 weeks if you are ill or your trip is in connection with ill-health or the death of a relative.

After the temporary absence period, you will not be treated as being in the UK. This means that if you are part of a couple, you will need to end your joint award and the partner who remains in the UK will need to make a new single claim for support. If the absence was temporary at the outset and so the 8-week/12-week rule applies, your joint claim can continue until that 8 or 12 week period ends.

However, when the overseas partner returns to the UK, the single award must end.

Living abroad

You usually cannot get tax credits if you live outside the UK. However, there are some exceptions, for example if you live outside of the UK and you are a Crown servant posted overseas or the partner of a Crown servant posted overseas you may be able to claim tax credits. There is more information on the GOV.UK website.

If you are married or in a civil partnership with someone who lives outside the UK you would usually make a single claim. If they live outside of the UK but in an EU country, you should contact HMRC before claiming to check with them whether to make a joint or single claim.