SALARIES / JUL. 27, 2014
version 5, draft 5

How to Claim Working Tax Credits in the UK

Working Tax Credits (WTC) is a UK state benefit available to individuals and families in low-paid employment or self-employment. Although many regard the system as overly complex, there is no doubt that it can be a lifeline for hard-up families; it can amount to many thousands of pounds and make the difference between struggling and living relatively comfortably.

In terms of the precise amount you may receive if you qualify, this will be dependent on the hours you work, the amount you earn and your family arrangements.

Also, it’s worth noting that in the next few years, the Government is aiming to replace WTC with a new state benefit called Universal Credit. It is estimated that this process will be completed by 2017.

How Do I Qualify?

In order to qualify for WTC, you need to:

- Be aged 16 or over
- Work and expect to get paid (or paid in kind) for a certain number of hours work a week (the number of hours depends on your age and circumstances). Also, the work must last for 4 weeks or be expected to last for 4 weeks
- Have earnings that do not exceed a certain level (this limit will be worked out based on your own personal circumstances)

The number of hours that need to be worked a week are listed below. If you are:

- Aged 25-59: 30 hours or more
- Aged 60+: 16 hours or more
- Disabled: 16 hours or more
- Single with 1 or more children (under 16 or under 20 and attending an approved education or training course): at least 16 hours
- A couple with 1 or more children: at least 24 hours (with 1 of you working at least 16 hours)

However, the following do not count as paid work:

- ‘Rent a Room’ scheme
- Work done while serving a prison sentence
- Money earned as a grant for training or studying
- A sports award

How Much Will I Receive?

The amount you receive will depend on a number of different factors based around your personal circumstances.

The basic amount of WTC is up to £1,940 a year (2014/2015)

As well as this basic amount, there are also other ’elements’ that will increase the amount you could receive. If you:

- Are a couple applying together: up to £1,990 a year
- Are a single parent: up to £1,990 a year
- Work at least 30 hours week: up to £800 a year
- Have a disability: up to £2,935 a year
- Have a severe disability: up to £1,255 a year
- Pay for approved childcare: up to £122.50 (for 1 child) or £210 (for 2 or more children) a week

Remember, any change in your circumstances could affect the amount you are entitled to. Therefore, it is very important that you always keep the Tax Credits Office informed of any relevant event, such as a change in the number of hours you work, otherwise you could miss out on extra money or find you have to pay back money you were overpaid.

How Do Apply?

Applying for WTC is a simple process. Even if you are on leave from work or about to start a new job in the next 7 days, you can still apply.

The first step is to obtain a claim form from the Tax Credits Office. You may wish to use the tax credits quick questionnaire or the tax credits calculator to work out what you may receive.

Call the Tax Credit Helpline for a claim form.

You will be asked a number of questions to establish your identity and possible eligibility for WTC. Information you will need to supply includes:

- Your National Insurance number (if applicable)
- Your income for the previous tax year
- Details of any other benefits and childcare payments you receive

It can take up to 2 weeks for the form to arrive and up to 5 weeks for your application to be processed once you have returned the form.

If you are successful with your application for WTC, make sure that you retain records of your income, bills, benefits, tax credits and details of childcare and schooling for at least 3 years.

As always, do your own research and if you have any other questions, just contact the Tax Credits Helpline.


Image source: Telegraph

Get our FREE eBook!
'6 Steps to Landing Your Next Job'





Get our FREE eBook!
'6 Steps to Landing Your Next Job'

G up arrow
</script> </script>