Tax Credits

Working and Child Tax Credits rates

£ per year (unless stated) April 2015ChangeApril 2016
Working Tax Credit
Basic element£1,960-£1,960
Couple and lone parent element£2,010-£2,010
30 hour element£810-£810
Disabled worker element£2,970-£2,970
Severe disability element£1,275-£1,275
Childcare element of the Working Tax Credit
Maximum eligible cost for one child£175 per week-£175 per week
Maximum eligible cost for two or more children£300 per week-£300 per week
Percentage of eligible costs covered70%-70%
Child Tax Credit
Family element£545-£545
Child element£2,780-£2,780
Disabled child element£3,140-£3,140
Severely disabled child element£1,275-£1,275
Income thresholds and withdrawal rates
First income threshold£6,420-£6,420
Withdrawal rate41%-41%
First threshold for those entitled to Child Tax Credit only£16,105-£16,105
Income rise disregard£5,000-£2,500£2,500
Income fall disregard£2,500-£2,500

The working tax credit provides guaranteed income from full-time work for those aged 25 or over. In most cases it will be paid via your employer.

The amount paid depends initially on the claimant's current personal and family circumstances and income in the previous tax year. The amount can change if the claimant's income or circumstances change. Refer to the working tax credit rates for more information.

The following groups may qualify for additional elements:

  • couples
  • lone parents
  • those working over 30 hours a week
  • disabled workers
  • people aged 50 or over returning to work after a period of benefits.

Are you eligible?

Working tax credit is for people who are employed or self-employed (either on their own or in a partnership), who

  • usually work 16 hours or more a week
  • are paid for that work, and
  • expect to work for at least 4 weeks.

and who are

  • aged 16 or over and responsible for at least one child, or
  • aged 16 or over and disabled, or
  • aged 25 or over and usually work at least 30 hours a week.

In addition, to qualify for tax credits you must be aged 16 or over and usually live in the United Kingdom. You may also qualify if you do not live in the UK but you are:

  • a citizen of another country in the European Economic Area (EEA) and you work in the United Kingdom, or
  • a crown servant posted overseas, or
  • a citizen of a country in the European Economic Area (including the UK) living abroad and you receive a UK state pension or contributions-based jobseeker's allowance.

To discover whether you qualify for tax credits, complete the questionnaire at the HM Revenue & Customs tax credits web site.

Child Benefit rates

£ per weekApril 2016
Eldest/Only Child£20.70
Other Children£13.70

Guardian's Allowance rates

£ per weekApril 2016
Guardian's Allowance rates£16.55

Child tax credit combines all income related support for children and will be paid direct to the main carer's bank or building society account.

The child tax credit is made up of two elements: a family element and child elements. A higher family element is paid to families with at least one child under one year old.

Who is eligible?

Child tax credit can be claimed by people who are responsible for:

  • at least one person aged under 16 or until the first September after that child's 16th birthday; or
  • at least one person aged 16, 17 or 18 who is in full time education, normally studying at school or college for at least 12 hours a week for a qualification, at or below NVQ Level 3, A Level or Scottish Highers.

In addition, to qualify for tax credits you must be aged 16 or over and usually live in the United Kingdom. You may also qualify if you do not live in the UK but you are:

  • a citizen of another country in the European Economic Area (EEA) and you work in the United Kingdom, or
  • a crown servant posted overseas, or
  • a citizen of a country in the European Economic Area (including the UK) living abroad and you receive a UK state pension or contributions-based jobseeker's allowance.

What is it worth?

It is estimated that up to 90% of households with children will qualify for the child tax credit. However, not everyone will receive the same amount.

The minimum tax credit (for families with an income under £50,000) is currently £545. The maximum tax credit varies depending on household circumstances, from just over £5,000 if you have one child and no childcare costs to over £13,000 for those with higher expenses and more children. Refer to the child tax credit rates above for more information.

To discover whether you qualify for tax credits, complete the questionnaire at the HM Revenue & Customs tax credits web site.

Digita - Thomson Reuters
Digita - Thomson Reuters