Working Tax Credit
Child Tax Credit and Working Tax Credit
Tax credits will usually be the second thing you claim when there is a new child in your family. If you are already claiming tax credits, you need to let the Tax Credit Office know about the addition to your family. Tax credits are administered by the Tax Credit Office, which is part of Her Majesty's Revenue and Customs (what used to be called the Inland Revenue). Child Tax Credit is for people who are responsible for children.
Working Tax Credit is for people who work. Both payments are means-tested; they depend on your income, and you claim them together. Most families are able to get some Child Tax Credit. However, like child benefit, if you have come here from another country, you may not be able to claim tax credits at all. You should get specialist advice.
Although tax credits are not directly connected to how much tax you pay, they are based on annual income over the tax year. Income means your income and your partner?s income. When you first claim, your award will be worked out using your income for the previous tax year.
Children and the tax credit calculation
When you have or adopt your first child, you may become entitled to Child Tax Credit because you are responsible for a child for the first time. You may also become entitled to Working Tax Credit for the first time. This is because people without children usually have to be at least 25 and working at least 30 hours a week to be eligible for Working Tax Credit (exceptions to the 30 hour rule are disabled people and some people over 50 who have been on benefits), and even then you are unlikely to get any help unless your income is very low.
But once you have a child, you or/and your partner only have to work 16 hours or more a week, and as long as you are at least 16, you are eligible for Working Tax Credit. However, whether you get any help, and how much, still depends on your income.
Working tax credit and child tax credit are worked out together. You get different tax credit elements for different circumstances. These are added up to give your maximum tax credits, and the maximum is then reduced depending on your income. Once you have a child, you are more likely to get some help, because extra elements will be included in your claim.
If you have a child under one in your family, you get an extra element equivalent to £10.50 a week (sometimes called the baby element or baby addition). You will lose this when your child has their first birthday (unless another child under one has joined your family), so you should expect your tax credits to go down at this point. You only get one baby element, even if you have twins under one. There is more information about how tax credits are worked out in our factsheet 'Tax Credits and Benefits'.