What Exactly Are Tax Credits & Who Can Get Them?

There are two types of tax credits – child tax credits and working tax credits, you might be eligible for one or both of them, depending on your circumstances.

Child Tax Credits

Child Tax Credit is available to people responsible for a child or young person, who have income below a certain amount. The amount you get will depend on how many children you have, and whether they have any disabilities. Child Tax Credit is available whether or not you are in work and is paid to the main carer in a household, usually straight into a nominated bank account.

Working Tax Credits

Working Tax Credit is money for working people who are on a low income. It does not matter whether you are working for someone else or are self-employed.  The working tax credit is a payment to top up earnings of people working on low incomes, including those that do not have children. Extra amounts are payable if you have a disability, if you work 30 hours or more a week, and where you have childcare costs.

Means Tested

Tax credits are tax-free and you don’t have to be paying National Insurance or tax to qualify, but they are means-tested. So, whether you qualify and how much you get depends on your household’s income and circumstances.

NOTE: Tax Credits are due to be replaced by Universal Credit, transitional arrangements will apply from 2014 onwards. Full details have yet to be announced by the Government.

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