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Tax Credit in the UK: Types, Benefits

By Aaron Walsh


As far as UK tax credits are concerned, it is certainly prevalent that people are lost and have questions. To answer several questions, here are a number of important facts about UK tax credit which can be of interest for you.

What exactly is a tax credit?

Tax credits are generally supporting payments from your government. In the United Kingdom, we have two common types of tax credit: Working Tax Credit and Child Tax Credit. Both of these tax credits, the Child Tax Credit and Working Tax Credit, can advantage low income households but also people who have low income.

From the both kinds of tax credit, the working tax credit would be the more common one. It will help and support people with young children that are beneath a certain income limit. If you have a partner and you are actually married, you have to jointly claim this kind of tax credit.

For younger persons of age 16 or older there's the child tax credit. For this particular one it doesn't play a role whether or not you're at present employed or not.

Tax Credit Claim - What are the Eligibility Requirements?

Who will be able to claim? The very first requirement concerns where you are residing at the moment. You must live in the United Kingdom, England, Scotland, Wales or Northern Ireland. However, residents of the Isle of Man as well as the Channel Islands cannot apply due to those places not belonging to the UK.

For the child tax credit, all families with children, whose money is below ?58,000 a year (or up to ?66,000 per year if there is a young child under one year old), can submit an application for this credit. As for the working class credit, you need to work at least sixteen hours per week and be not less than 16 years old. However, you can also get this tax credit if

1. you will be aged 25 or over plus work at least 30 hours a week. 2. you are over the age of 16 with more than 16 hours work each week and also you qualify for working tax credit disability. 3. you work no less than 16 hours and are also older than fifty, returning to work after claiming out-of-work benefits.

Easy Method to Calculate your Tax Credit.

There is a website where you can determine your UK tax credits which is: hmrc.gov.uk/taxcredits/payments-entitlement/entitlement/question-how-much

While the tax credit calculator is quite straight forward, you should have the following details handy:

1. The actual forms with all your income details. If there is a partner or spouse, you will need both your earnings data. The P60 can be quite good to have, in cases like this for the earlier year ending on April 5, 2011. 2. All other sorts of needed information specific to the benefit you wish to claim. 3. Data about how many hours that you are currently working. 4. Note down the weekly hours you may spend on child care.

If you have got all this information, you can use the online tax credit calculator, regardless whether you would like to claim child tax credit or working class credit.




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