Am I claiming the right tax credits?

Tax credits are there to help boost your household income, and they can be worth hundreds or even thousands of pounds every year. Depending on your eligibility, you could claim for Working Tax Credit (for those working but with a low income) and Child Tax Credit (for those who have children).

Here we talk you through what tax credits are, how you can apply for them, and what action to take if you’ve been overpaid.

So, what exactly are tax credits?

The government make tax credit payments directly into your bank account. Currently, these two types are available:

Child Tax Credit

If you’re responsible for a child or children under 16 years old, you could be eligible for child tax credits. You could also qualify if you have children aged 16 to 19 in full-time study (for example, in sixth form or a further education college).

The amount you receive will depend on your income and circumstances (such as how many children you have living with you, and whether your child has a disability). You don’t need to be in work to claim Child Tax Credit.

Working Tax Credit

To qualify, you must work below a certain number of weekly hours and have an income below a certain level. You can be an employee or self-employed, it doesn’t matter – and you could be eligible for more money if you have children.

The basic amount of Working Tax Credit is as much as £1,960 a year. But depending on your income and circumstances, you could be eligible for more or less.

Remember – tax credits are currently being phased out and replaced by Universal Credit. See ‘Something to remember’ below to find out more.

How to claim

In order to apply for tax credits, you’ll need to fill in a TC600 form – available online (search ‘HMRC Tax Credit claim form’) or by calling the Tax Credit Office helpline.

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Your tax credits and overpayments

Remember that the amount you receive as tax credits is just an estimate; the figures are only finalised once you’ve renewed your annual claim.

Your tax credits could be increased, reduced or stopped if your circumstances change. If this is the case, you must report this to the Tax Credit Office as soon as possible (either by phone, online or post). Here are a few reasons why this could happen:

Your payments can go up because:

  • your income drops by more than £2,500
  • your benefits are reduced or stopped
  • you have a child
  • your childcare costs increase

Your payments can go down or stop because:

  • your income increases by more than £2,500
  • your haven’t renewed your claim for Tax Credits
  • you’ve already been overpaid
  • your child is now 16, 18 or 19 and your haven’t informed the Tax Credit Office that they’re now in education or training
  • you or your partner are now claiming Universal Credit

What to do if your income goes up

If your income increases by £2,500, tell the Tax Credit Office straight away. Don’t wait until your claim is due to be reassessed – or else you could end up being overpaid tax credits, and you’ll have to pay back any extra money.

If you have been overpaid, make sure you tell the Tax Credit Office within 30 days of receiving the extra money. That way, your bill won’t mount up and you won’t end up being chased for money further down the line.

If your income goes down

If your income falls by more than £2,500, you could be eligible for additional tax credits. Again, you need to inform the Tax Credit Office within 30 days of your change in circumstances – but do it sooner to ensure you get your entitlement as soon as possible.

Something to remember…

If you’re already claiming for Universal Credit, you cannot claim for tax credits at the same time.
Tax credits are currently being phased out by Universal Credit, which is a single monthly payment that covers care, housing, children and childcare.

Unsure? Contact HMRC

If you have any questions, the best course of action is to call the Tax Credit Office and speak to a team member in person.