There are two tax credits. Both are administered by HM Revenue & Customs (HMRC).
The working tax credit (WTC) is to 'make work pay' and provides:
- extra income to the working person
- up to 70% of the cost of childcare to the main carer of a child.
You don’t need to have children to claim working tax credit. The child tax credit (CTC) is to support families with a child or children. It is paid to the main carer. You don’t need to be working to claim child tax credit. You can claim one or both tax credits depending on your circumstances.
Although the take up of child tax credit is high, that for working tax credit only is low, particularly amongst workers without children.
Because tax credit rules can be complicated it is difficult for people to judge whether they may be entitled to either of the credits or the amounts they may receive. It is possible, in some unusual circumstances, for those with income of up to around £70,000 or £80,000 to obtain tax credits.
One way of testing your eligibility is to use one of the calculators that exist. Two which are worth examining further are those from Turn to Us or from HMRC. We prefer the former as it is rather simpler to complete and it also indicates whether other benefits might be available. It is important to note that the HMRC calculator only works out entitlement from the date the calculator is used until the end of the tax year.
HMRC are also responsible for administering child benefit but this requires a separate claim to tax credits.
