The HM Revenue & Customs quote that 9 out of 10 families with children are entitled to tax credits. The basic requirement is looking after at least one child; you may qualify for Child Tax Credit. If you work more than 16 hours and earn low wages then you may qualify for Tax Credits as well. How much you get depends on things like:
- How many children you have living with you
- Whether you work and how many hours you work.
- If you pay for childcare
- If you or any child living with you has a disability
- If your ages 50 plus and are coming off benefits
Your payments will also depend on your income, the lower your income the more tax credit you could get.
Tax and child credits do get a bit confusing in the way they work. They work by basing your payments on your current circumstances and your income from the previous tax year. A tax year runs from 5 April to the following 5 April.
Each April, May and June the tax Credit office will write to you and ask you to:
- Check the information they have on your personal circumstances
- Confirm the income you received in the year that has just ended
- Renew your claim.
Whilst this checking process is happening, the payments they pay you from 6 April until you have renewed your claim are provisional payments. After they have calculated the correct payment it works out that they have paid you too much you may be asked to pay them back. They will normally do this by adjusting your payments after the renewal. The same applies if they haven’t paid you enough.
The best way to avoid nasty surprises is to notify them of any change of circumstances as they happen.