How are tax credits paid?

Updated on 2 May 2018

Tax credits are usually paid straight into your bank account, by direct payment. This page details the process.

The Government is gradually introducing universal credit, a new benefit which will eventually replace tax credits, and some other social security benefits. Universal credit is being introduced geographically and in areas where the full (digital) service is available, it may no longer be possible to make a new claim for tax credits. Existing tax credit claimants are expected to be moved across to universal credit between 2019 and 2022. You can find out more about this in our universal credit section.

 

How often are tax credits paid?

Tax credit payments are usually made either four-weekly or weekly. You should tell HMRC when you claim which pay period you want; if you do not, they will automatically pay you every four weeks.

Tax credits are normally paid in arrears.

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How long do I have to wait for payment?

HMRC usually aim to get back to you about your claim within three weeks of receiving it. However, this can vary throughout the year and may be longer if they decide to check your claim in more detail. 

They will write to you and if you qualify for payments, the award notice they send you will tell you the date of your first payment and when you will get further payments. However, because of the way the HMRC computer system works, sometimes you might get your first payment before you get your award notice.

If you make any mistakes or leave gaps on your claim form, HMRC might contact you to get the missing information they need, which can mean you wait longer for your first payment while they deal with your claim.

If you do not have a National Insurance number when you claim, you should still send your claim in and HMRC will arrange for you to attend an interview to get a National Insurance number (or where this is not possible, to have your identity checked). This usually means you have to wait a little longer for your claim to be processed.

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We have a joint claim – who gets the tax credits payment?

In a joint claim if only 1 of you works, that person will get the WTC payments; if you both work, you can choose between you and your partner which of you receives WTC payments.

Often where you both work, it does not matter who receives payments of WTC in a couple. However, if you are on a low income and rely on WTC to get national insurance credits the choice may be important because the WTC national insurance credits are only awarded to a person who actually receives WTC. You can find out more our website for advisers.

Any payment of the childcare element of WTC will normally be paid with CTC to the main carer of the child or children.

If you get CTC only, then the person who is the main carer will be paid the CTC.

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What kind of bank account do I need?

Your account needs to be any of the following:

  • a bank account
  • a building society account
  • a Post Office card account
  • a National Savings & Investments account (NS&I).

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What if I do not have a bank account?

In September 2016, the rules were relaxed to make it easier for people to be able to open a basic bank account. If bank account details are not included on the claim form, HMRC will write to you asking for details within 4 weeks (this was 8 weeks prior to 6 April 2012). If the details are not provided within that time, HMRC have the power to suspend tax credit payments. You should contact HMRC if you have a problem getting a bank account.

Previously, HMRC paid people without a bank account by cashcheque. From 7 August 2017, HMRC introduced payment vouchers to replace payments by cashcheque. Payment vouchers will only be given in the following circumstances:

  • Where someone has arrived in the UK as a refugee who does not immediately have a UK bank account. This will be temporary measure until an account is opened.
  • Where someone is prohibited from opening a bank account
  • Where someone is not able to provide account details for another reason
  • Where someone needs to receive an emergency payment due to hardship who do not have a bank account

Claimants who meet this criteria will be sent a barcode and unique reference number by letter, or just a reference number by SMS text, which can then be taken to any Post Office where they will receive their payment. ID may need to be taken to the Post Office and this will be explained when the code is sent – examples of ID that will be accepted include a valid UK/EU driving photo licence, valid UK passport, Utility Bill/Statement issued in the last 6 months or a letter from a Government department.

Each payment voucher expires 1 month after the date of issue.

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Can I use someone else’s bank account for my tax credit payments?

The bank account needs to be one of the following:

  • in your name
  • in your partner's name
  • both in your and your partner's names
  • in the name of someone acting on your behalf
  • jointly in your name and in the name of someone acting on your behalf, or
  • in someone else’s name – but it is up to you to make sure you get the money from that person.

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What if I have not received my payment?

If you have not heard anything about your claim and payments after three weeks and you are struggling to pay essential bills, you should call the Tax Credits Helpline to see if there is any information they are still waiting for. This can be found on the GOV.UK website.

If you have not received a normal payment that you were expecting, it is a good idea to speak to your bank to see if anything has gone wrong at that end. If not, you should call the Tax Credits Helpline. It may be that you have changed your bank details or there has been a change in circumstances that has altered the amount of tax credits you get. If HMRC have made an error, they should be able to re-issue a payment, but they may need to check to see what happened if a payment has gone missing.

More information

This page gives a brief overview about tax credit payments. There is more information on the GOV.UK website and a tool where you can manage your tax credits.

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