Working Tax Credit

Working Tax Credit is intended to top up the earnings of working people on low incomes.

Extra money may be available if you have a disability (including Parkinson's) that puts you at a disadvantage in getting a job.

What is Working Tax Credit?

Working Tax Credit is a benefit managed by HM Revenue and Customs to top up the earnings of working people on a low income.

You can only get it if you (or your partner, if you have one) are in paid work or are in the 4-week ‘run-on’ period after stopping work.

Entitlement is based on the number of hours of paid work you do. Self-employed work counts, but unpaid work does not.

Extra money is available if someone in your household has a disability (including Parkinson’s) or if you pay for childcare.

A new benefit called Universal Credit will replace Working Tax Credit over the next few years.

Do I qualify for Working Tax Credit?

You may qualify for Working Tax Credit if, at the time you make your claim, you are in paid work (or you are starting paid work within 7 days) that will last for at least 4 weeks.

You must work a certain number of hours to qualify (either 30 hours or 16 hours a week, depending on your age and circumstances – see below for details).

Your income must be low enough for Working Tax Credit to be paid. The exact income threshold depends on your circumstances – see the gov.uk tax credits calculator for more information. 

You must be at least 16 years old, and you must be present and ordinarily resident in the UK and not subject to immigration control. 

How many hours do I have to work?

You must normally be aged 25 or over and work at least 30 hours a week to qualify for Working Tax Credit.

However, you can claim from the age of 16 and/or only need to work 16 hours or more a week in the following circumstances:

  • You are a single parent responsible for a child or 'qualifying young person'. A qualifying young person is, broadly speaking, someone who is aged 16-19, still in education or approved training, for whom you can claim Child Benefit.
  • You are in a couple, one or both of you are responsible for a child or qualifying young person, one of you works at least 16 hours a week, and you work at least 24 hours a week between you.
  • You are in a couple and one or both of you are responsible for a child or qualifying young person, and one of you works at least 16 hours a week where the other partner is incapacitated (including if they get Personal Independence Payment, Disability Living Allowance or Attendance Allowance), entitled to Carer’s Allowance, or in hospital or prison.
  • You or your partner qualify for the disabled worker element.
  • You are aged 60 or over.

How much is Working Tax Credit?

The amount of Working Tax Credit you receive will be based on your circumstances, including how many hours you normally work and your income.

It is paid in addition to any Child Tax Credit you may be entitled to. Child Tax Credit is a means-tested benefit for people, working or not, who are responsible for children. There is more information about Child Tax Credit in Disability Rights UK's information – a guide to Tax Credits.

You can get an estimate of how much you might receive in Working Tax Credit and Child Tax Credit using the gov.uk tax credits calculator.

How is your tax credit worked out?

Working Tax Credit and Child Tax Credit are made up of one or more elements. All the elements you are eligible for are added together. The total is then reduced as necessary in proportion to your earnings and other income (if this amounts to more than £6,420 a year). The higher your income, the less Tax Credit you get.  

The elements of Working Tax Credit are:

  • basic element – included in all claims
  • lone parent element – if you are single and responsible for a child or qualifying young person
  • couple element – if you are a couple (with or without children)
  • 30-hour element – to give people an incentive to work 30 hours a week or more
  • disabled worker element
  • severe disability element – if you get higher rate Attendance Allowance, the highest rate of the care component of Disability Living Allowance, the enhanced rate of the daily living component of Personal Independence Payment (PIP), or Armed Forces Independence Payment
  • childcare costs element

The disabled worker element

The disabled worker element is payable if you or your partner (it has to be the person who is working) has a disability (such as Parkinson’s) that puts you at a disadvantage in getting a job, and you are receiving a qualifying disability benefit (this can include PIP, Disability Living Allowance or Attendance Allowance).

The childcare costs element

Working Tax Credit also helps with the costs of registered or approved childcare. The childcare element of Working Tax Credit is worth up to 70 pence for every pound you spend on childcare. For example, if you spend £100 a week on childcare, the childcare element could be up to £70 a week.

There are limits to the amount you can receive: £122.50 a week for one child and £210 a week for two or more children.

As with Tax Credits as a whole, the help you get with childcare costs depends on your income, and the amount you actually end up with may be reduced after your income is taken into account.

How is Working Tax Credit paid?

Working Tax Credit is generally paid to the person who is working. However, the childcare element normally goes to the carer.

If you and your partner both work 16 hours a week or more, you must choose who will receive it. HM Revenue and Customs pays it directly into your bank account.

How do I claim Working Tax Credits?

To claim, you need to call HM Revenue and Customs on 0345 300 3900 (textphone 0345 300 3909). Calls are charged at local rates.

More information on Working Tax Credit is available online. 

What information do I need to claim?

For Tax Credits for the tax year 2017 to 2018, you will need to provide:

  • your earnings and income details (and those of your partner) for the last tax year
  • your National Insurance number (and that of your partner)
  • details of any benefits you get
  • details of any childcare payments you make
  • your P60 tax certificate given to you by your employer after the end of the tax year, and your tax form P11D (if you receive one)
  • any statements your bank and/or building society send you of taxable interest received in that tax year
  • details of your taxable profits or losses for that year, if you are self-employed

Awards for the current tax year are based on a predicted estimate of your income that year. As this is not yet known, the estimate is, to begin with, based on your actual income in the previous tax year.

This sounds confusing but it works out in the end, because after the current tax year has ended, your final award is based on your actual income in that year.

To help you claim, you should keep any information about your earnings and income during the previous tax year and the current tax year. For example, you should keep:

  • your P60 tax certificate given to you by your employer after the end of the tax year, and your tax form P11D (if you receive one)
  • any statements your bank and/or building society send you of taxable interest received in that year
  • details of your taxable profits or losses for that year, if you are self-employed

Will the amount I receive change due to the introduction of Universal Credit?

Once Universal Credit has been fully introduced and you are eligible to claim it, a change in your circumstances may mean that you need to claim Universal Credit, instead of Working Tax Credit. This could happen if you lose your job.

It is not possible to claim Tax Credits at the same time as Universal Credit, so when you move on to Universal Credit, your Tax Credit entitlement will end.

Your Tax Credit award will be finalised at this point, rather than waiting for the final review at the end of the tax year.

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Working Tax Credit (PDF, 200KB)

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