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How to find out if you’re entitled to tax credits

Posted 23 July 2015

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Learn how tax credits work alongside any other benefits you’re claiming and when you’re working.

When you want to maximise your income, it’s really important that you don’t forget to look into the benefits that you and your family might be entitled to. If you’re on a low income, it’s possible that you could be entitled to tax credits. Tax credits fall into two categories: working tax credits and child tax credits, so depending on your circumstances you might be entitled to one or both of them.

Child tax credit

If you’re responsible for one child or more, you may be able to claim child tax credits. You can only claim this if the child is under sixteen (or under twenty and still in full time education). If your child turns 16 while you’re claiming, but stays in full time education, you’ll still be entitled. You just have to let the tax office know. You can claim for each child, you’re responsible for (although only one claim can be made per household for a child).

If you’re also receiving child benefit, don’t worry it won’t be affected. You also don’t have to be working to claim this.

There are some other benefits though that may be reduced if you were to claim tax credits, such as job seekers allowance, housing benefit and income support, so just remember to check this.

Working tax credit

You can claim working tax credits if you have a child or if you have a disability and are working a certain number of hours per week.

The basic amount that you could get would be £1,960. But again, this is a means tested benefit, which means that your income would have to be below a certain amount before you would be able to claim it.

Am I entitled?

Whether or not you’re entitled to these benefits will depend on your income. So for instance if you had one child then the maximum you could earn is £26,000 per year, and if you had two children the maximum you could earn is £32,200.

For working tax credit it’s all about the hours that you work, so for instance if you were a single parent you would need to work over 16 hours per week to be eligible.

Have a look on the government’s website to see the full details and whether you could be claiming.

Child care vouchers

Child care vouchers are provided by some employers so that their employees can use them to pay for childcare. To get them the employee has to agree to sacrifice a certain part of their salary and then the voucher would be for that amount. The good thing about them is that you don’t have to pay any National Insurance or income tax on the amount of the vouchers.

If you’re looking into getting working tax credits, and you are already getting child care vouchers from your employer, then just remember that these could affect the amount of tax credits that you are entitled to. Use the handy calculator on the Government’s website to see whether you would be better off with the childcare vouchers or without.

All in all, it’s a good idea to familiarise yourself with these benefits and find out whether there’s extra help that you should be getting to maximise your income and support you and your family. However, if you’re in a difficult financial position and are struggling with problem debt, or struggling to keep up with essential living costs and don’t think that these benefits would be able to bridge the gap, remember help is at hand. Use one of the options on the side of the page to contact us and see how you could improve your situation. 

by Christine Walsh

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