If you have children and you’re on a low income, you could be eligible for Child Tax Credits to help you with the costs of raising a child. This is one of the benefits being replaced by Universal Credit. This page will tell you if you’re still able to claim Child Tax Credit.
- Universal Credit and Child Tax Credit
- What is Child Tax Credit?
- How much is Child Tax Credit?
- Child Tax Credit income limits
- Child Tax Credit and income thresholds
- Child Tax Credit and how old your children are
- How to claim Child Tax Credit
- Keeping your tax credits up to date
- Tax Credits and income changes
- Other tax credits you might qualify for
Universal Credit and Child Tax Credit
Most people will not be able to make a new claim for Child Tax Credit and will have to apply for Universal Credit instead.
If you have three or more children (unless you have a multiple birth or have adopted), you will not be asked to claim Universal Credit and can still make a new claim for Child Tax Credit.
You can also make a new claim for Child Tax Credit if you or your partner is eligible for Pension Credit and have dependent children.
If you’re already claiming Child Tax Credit, you will have to move to Universal Credit before March 2023. How and when you move depends on if you have to make a new claim because of a change in circumstances, or are asked to claim Universal Credit by the Department for Work and Pensions (DWP).
Tax credits and a change in circumstances
You must tell the Tax Credit Office within 30 days if you have a change of circumstances, such as:
- losing or getting a job
- having a baby
- a partner moving in or out.
This might mean you will have to make a new claim for Universal Credit. The Tax Credit Office will tell you what you need to do.
Call the Tax Credit Helpline on 0345 300 3900 to let them know about any changes to your circumstances.
What is Child Tax Credit?
Did you know?
You don’t need to be working to claim Child Tax Credit.
Child Tax Credit is a benefit to help with the cost of raising a child.
You might be able to get it if you’re over 16 and responsible for a child who is either:
- under 16
- under 20 and in full-time education or training.
How much is Child Tax Credit?
The rates for the 2018 to 2019 tax year are:
| Elements | Yearly amount |
|---|---|
| The basic amount or ‘family element’, but depends on your child’s age | Up to £545 |
| For each child (the ‘child element’) | Up to £2,780 |
| For each disabled child (the disabled child element’) | Up to £3,275 (in addition to the child element) |
| For each severely disabled child (the ‘severely disabled child element’) | Up to £1,325 (in addition to the child and disabled child elements) |
The amount you get also depends on things like:
- your income
- whether your child has a disability, and
- how many children you have living with you.
Child Tax Credit income limits
If you’re still eligible for Child Tax Credit, the Tax Credit Office will take into account your circumstances (and those of your partner) when deciding how much you’re entitled to.
The tables below give you a rough idea of the upper annual household income limits for getting Child Tax Credit.
If your income is around or below these amounts you might be able to get it.
If you have childcare costs
| Number of children | Annual household income limit for 2018-19 |
|---|---|
| 1 | £40,000 |
| 2 | £55,000 |
| 3 | £65,000 |
If you don’t have childcare costs
| Number of children | Annual household income limit for 2018-19 |
|---|---|
| 1 | £25,000 |
| 2 | £35,000 |
| 3 | £40,000 |
Child Tax Credit and income thresholds
If you’re getting Child Tax Credit and your annual household income is £16,105 or below, you’ll get the maximum amount for each Child Tax Credit element you qualify for.
This is called the income threshold. Anything you earn above this will reduce the amount of tax credits you can get.
They will be reduced by 41p for every £1 of income.
If you’re getting Working Tax Credit and Child Tax Credit, your income threshold is lower.
Your tax credits will start to reduce once you earn above £6,420.
Child Tax Credit and how old your children are
As well as income, when your children were born affects the amount you get.
If all your children were born before 6 April 2017
The ‘child element’ could apply for all your children.
You’ll also get the ‘family element’.
If one or more of your children were born on or after 6 April 2017
The ‘child element’ will apply for up to two children. You might be able to get the ‘child element’ for more children if you meet certain exceptions. You can read about the exceptions for the two-child limit on the GOV.uk website.
The ‘family element’ will only apply if at least one of your children was born before 6 April 2017.
How to claim Child Tax Credit
You can apply for tax credits online at Gov.uk or you can request a form by phoning 0345 300 3900*.
*There may be call charges. See Gov.uk for details.
Keeping your tax credits up to date
You need to renew your tax credits claim every year if you want to keep getting them.
The Tax Credit Office will write to you telling you what you need to do to renew your tax credits. You should get your pack in May or June and the deadline to respond is usually 31 July each year. If you don’t get your renewal pack, you’ll need to contact the Tax Credit helpline
as soon as you can to make sure you can meet the deadline.
If you miss the deadline
- You’ll be sent a ‘statement of account’, telling you your tax credits will stop, and any provisional payments you receive will be classed as an overpayment and will need to be repaid.
- You should contact the Tax Credit Office within 30 days of the date on your statement of account. A renewal can then be processed to reinstate your claim back to 6 April.
- If you contact the Tax Credit Office later than 30 days after you get your statement of account, you’ll only be able to have tax credits reinstated where you can show you have ‘good cause’ for renewing late. You’ll need to contact them by 31 January. Your claim will then be treated as if it was made on 6 April.
- If your claim is not reinstated, you can make a fresh claim but this can only be backdated 31 days, and you’ll need to repay any overpayments.
When you do renew, make sure you use the official HMRC phone number, website and correspondence as around the deadline time there is often an increase in fraudulent activity which often targets those likely to be reapplying.
You can manage and renew your tax credits online at Gov.uk or by calling the Tax Credit Office on 0345 300 3900*, but this line can get very busy in the days leading up to the deadline, so give yourself plenty of time.
There is also online help available to support you when you’re renewing online, including a webchat facility to help try and answer queries around renewing.
In addition, there’s a special team to support the most vulnerable customers who cannot go online. People HMRC know need special support will be proactively contacted by the support team.
You should inform them if your circumstances change at any time during the year, for example, if your income changes, your child leaves home or you move house. You might have to claim Universal Credit instead.
Tax Credits and income changes
The amount by which your income can change before you have to tell the Tax Credit Office is £2,500.
This is called the income disregard.
If your income goes up by £2,500 or more and you delay telling the Tax Credit Office or wait until the next time your claim is due to be re-assessed, you might find you have been overpaid tax credits.
You’ll be asked to pay this extra money back, either by reducing your future tax credits or by direct payments if your tax credits have stopped.
To avoid this bill, it’s even more important to tell the Tax Credit Office within 30 days of when you get the extra money.
It’ll be easier for your tax credits to be adjusted, and decrease the chance you’ll be chased for over-payments at a later date.
It also works the other way. If your income falls by £2,500 or more, you might be entitled to more tax credits.
If you’re asked to repay tax credits and will struggle to pay, speak to the Tax Credit Office as soon as you can.
Other tax credits you might qualify for
Important
Working Tax Credit is also being replaced by Universal Credit.
If you qualify for Child Tax Credit, are in work and you’re on a low income, you might be eligible for Working Tax Credit to top up your earnings.
If you work and you’re on a low income, you might be eligible for Working Tax Credit to top up your earnings.
And if you have children and you work, you might be eligible for the ‘childcare element’ of Working Tax Credit to help with the cost of childcare.
When you apply for Child Tax Credit you’ll also be told whether you qualify for Working Tax Credit.
There’s no need to claim them separately.
Remember, if you’re eligible for Working Tax credit, your income threshold for the maximum tax credit amount will be lower.
This article is provided by the Money Advice Service.
