Park McKillop & Company - Tax credits

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Tax credits

What are tax credits?

Tax credits are payments from the government. If you're responsible for at least one child or young person, you may qualify for Child Tax Credit. If you work, but are on a low income, you may qualify for Working Tax Credit. You can often get both types of tax credits. They aren't taxable.

What type of tax credits can you get?

You may get one of the following - or both.

Working Tax Credit

Working Tax Credit is based on the hours you work and get paid for, or expect to be paid for. You can claim whether you're an employee or a self-employed person. But unpaid work doesn't count for Working Tax Credit.

Child Tax Credit

Child Tax Credit is paid to you if you are responsible for at least one child or young person who normally lives with you. You don't have to be working to claim Child Tax Credit.

How much do you get?

The amount of tax credits you get depends on things like:

  • how many children you have living with you
  • if you live with someone as a couple
  • whether you work - and how many hours you work
  • if you pay for childcare
  • if you or any child living with you has a disability
  • if you're aged 50 or over and are coming off benefits

Your payments also depend on your income. The lower your income, the more tax credits you can get.

What are the current income limits for getting tax credits?

If your annual income is not above one of the following 'limits', you can probably get tax credits:

  • if you have 1 child it is 26,000
  • if you have 2 children it is 32,200
  • if you're single without children it is 13,000
  • if you’re in a couple without children it is 18,000

These are the limits for getting tax credits in the current tax year - ending on 5 April 2014.

You're not likely to get anything if your income is above these amounts. But it's important to know that:

  • these income limits don't apply to everyone - for example if you have a large family, pay a lot in childcare, or have a disability, the income limit could be higher
  • you need to make a claim to get a definite answer to how much you are entitled to

Renewing your tax credits

Each year during April, May or June the Tax Credit Office will write to you asking you to:

  • check the information they have about your personal circumstances
  • confirm the income you received in the year that has just ended

This is known as 'renewing' your tax credits claim. The deadline for renewing is usually 31 July.

Changes at home and work

If your circumstances change at any time this can affect the amount of money you should be getting. Things like starting a new job, splitting up with a partner or having a baby can all make a difference to your tax credits.

Contact the Tax Credit Office as soon as possible to tell them about any changes. To do this you can call the Tax Credit Helpline, or write to the Tax Credit Office. But you can't report changes online for tax credits.

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