Can I claim tax credits?

Updated on 9 April 2019

Disabled people and carers

On this page we provide additional answers to questions regarding entitlement to tax credits.

This information is provided in addition to our main section on tax credits and benefits.

Now that universal credit (UC) is available across the UK, most people can no longer make a brand new claim for tax credits and will be expected to claim UC (or pension credit if they have (both in a joint claim) reached their state pension qualifying age).

Will I get working tax credit (WTC)?

To be able to get WTC you need to be in qualifying remunerative work. In a nutshell this requires you to be working or about to start paid work, to be of a certain age and to work for a certain number of hours a week.

The work you do as a qualifying carer will fall under this heading if you are paid under a contract of employment as an employee or you are paid for your care services as a self-employed carer (that is, if your caring activities are treated as qualifying remunerative work).

There have been occasions when HMRC have incorrectly denied WTC to carers, so make sure you do not miss out.

You should bear in mind that in the case of a joint claim, you and your spouse or partner may have other work apart from caring and this may also be qualifying remunerative work for WTC purposes.

There is more information in the tax credits and benefits section.

Back to the top

Will I get child tax credit (CTC)?

You can claim CTC if you are responsible for one or more children or qualifying young persons.

You are treated as responsible for your own children but not for a child or young person who has been placed with you by the local authority, and is looked after by the local authority. Therefore you can claim CTC for your own children, but not for your foster children.

This also applies if you are a potential adopter but the local authority pays you for accommodation or looking after the child or both.

However, adopters and guardians of children or young persons who have parental responsibility for them (for example, under a special guardianship order or a residence order) can claim to be responsible for the child in their care and so can claim CTC for them.

With CTC, it does not matter if you are in work when you claim.

New rules apply to child tax credit from 6 April 2017 which limit the number of child elements you can receive to a maximum of two children. Children born before 6 April 2017 are not affected by the change and there are some exceptions, including one for non-parental care arrangements, that mean you can get more than two child elements even for children born after 6 April 2017.

There is more information on tax credits generally including the 2 child limit in the tax credits and benefits section.

Back to the top

How does my income from caring affect the tax credits I get?

The amount of tax credits you get will be based on the level of your household income (the combined income of you and your partner if you have one).

Qualifying care receipts paid by local authorities and similar agencies are only taken into account in working out tax credit income to the extent that they are taxable. Therefore, if you use the qualifying care relief simplified method for working out your profits for income tax Self Assessment, your income from caring for tax credits purposes will be the amount on which you pay income tax. If your care receipts are wholly covered by the qualifying care relief exemption, then none of your income from caring is counted in assessing your tax credits entitlement.

Also, if you use the standard method, your caring income for tax credits will be the same as your taxable profits after deductions.

There is more information in the tax credits and benefits section.

Back to the top

How will universal credit affect me?

Tax credits are being replaced by universal credit (UC). UC was rolled out gradually to start with but now that it is available across the UK, most people can no longer make a brand new claim for tax credits. Most existing tax credit claimant will not be affected by UC until they are moved over to UC by DWP/HMRC in an exercise (‘managed migration’) which is expected to run between November 2020 and December 2023, following a 12 month pilot starting in July 2019. However, some changes of circumstances, for example changing from a joint to a single claim, and vice versa, may mean their existing tax credit claim comes to an end and any new claim will need to be for UC (or pension credit, depending on age).

You can find out more in our universal credit section.

Back to the top