Many families with children can claim Child Tax Credit. Working Tax Credit can help you pay for childcare and top up low earnings.
There is a calculator on the HMRC website to work out how much you might get. (see link at bottom of post)
Phone Number: 0345 300 3900
Having children puts a strain on the family budget, but the government provides cash to help. This comes in the form of Child Benefit and tax credits.
Tax credits depend on your household income (usually from the previous tax year), but even families with an income up to £58,175* a year or £63,350* if they have a baby under one, are eligible for some help.
Who can get tax credits?
There are two types of tax credit – you make one claim that covers both.
Child Tax Credit is tax-free income for households with children. There is a family element that most families get and a child element payable for each child. You get extra if your child has a disability.
Working Tax Credit is tax-free income for households where you and/or partner, if you have one, work but your income is fairly low. Families with children qualify provided you or your partner work at least 16 hours a week. Working Tax Credit includes a childcare element that can provide up to £240 a week towards the cost of childcare so that you can get out to work.
You may be able to claim Working Tax Credit while on maternity or paternity leave.
You count as being in work for the first 25 weeks of ordinary maternity leave, and the first 13 weeks of any additional maternity leave. You’re also treated as being in work for the two weeks of paternity leave.
You can therefore continue to get Working Tax Credit as long as you worked at least 16 hours a week immediately before you went on leave. If you go back to work immediately after your first 39 weeks of maternity leave are over, you can continue to claim Working Tax Credit.
Any further leave (whether paid or unpaid) you take after the first 39 weeks of maternity leave or the two weeks of paternity leave doesn’t count as being in work. So you may not be able to claim or continue receiving Working Tax Credit for this period unless you have a partner who is working at least 16 hours a week.
If you are claiming Working Tax Credit and you don’t go back to work immediately after the first 39 weeks of maternity leave or the two weeks of paternity leave end, you need to let the Tax Credit Office know within 30 days. If you don’t, you may be paid too much money which you’ll have to pay back and you may have to pay a penalty.
Child Tax Credit Elements
||Who can get it
||All claimants with one child or more
|Family – baby addition
||Extra amount where there is a child under the age of one
||For each child
||Extra for a child who is blind or getting Disability Living Allowance (DLA)
|Severely disabled child
||Extra for a child getting the highest-rate care component of DLA
Working Tax Credit elements
||Who can get it
|Couple or lone parent
||Claimant who has a partner or single-parent claimant
||Claimant working at least 30 hours a week or their partner, if they have one, does. Couples with children can add together their working hours to reach the 30-hour threshold
||Claimant or partner at disadvantage getting a job because of disability and getting certain state help
||Claimant or partner qualifies for certain state help because of severe disablity
|50+ return to work
||Paid for first year where claimant is aged 50 or more and is returning to work after at least six months on state help. Higher rate where claimant works at least 30 hours a week
||£1,320 or £1,965
||Household paying childcare costs. Covers eligible costs up to £175 a week for one child or £300 a week for two or more. Must be approved childcare – for example registered childminder, nursery or after-school club. Where a couple claim, normally both must work at least 16 hours a week
||80% of eligible costs
* Rates shown are for the tax year 6 April 2010 to 5 April 2011.
Taken from The Consumer Financial Education Body
Tax credit calculator: www.hmrc.gov.uk/taxcredits/questionnaires.htm