personal finance

Tax credits: Who is eligible for tax credits? How much can you earn?


If you have lost your job to coronavirus, you might be wondering if you are eligible for tax credits. Tax credits are a mechanism to redistribute income to those on lower wages. There are two types: child tax credits, and working tax credits. But who is eligible for them? and how much can you earn?

What are tax credits?

Child tax credits are sums of money paid to families with children- and working tax credits are paid to people in work on lower incomes.

The main purpose of tax credits is to help families on lower incomes make ends meet.

In 2010, the coalition government announced that the working tax credit would be integrated into and replaced by the new universal credit.

However, this may not be finished until 2022, and from 2018 it was decided that no new claims can be made for working tax credit.

Existing working tax credit claimants will not be transferred to universal credit until 2022.

Who is eligible for tax credits?

Tax credits have been replaced by Universal Credit for most people, so most people can’t make a new claim for tax credits.

You can only make a new claim for tax credits if you:

Get the severe disability premium, or are entitled to it

Got or were entitled to the severe disability premium in the last month, and you’re still eligible for it

If you are still struggling and cannot make a new claim for tax credits, you can look into applying for Universal Credit (or Pension Credit if you and your partner are above State Pension age)

If you already get tax credits, this may end if your circumstances change.

Also, making a claim for Universal Credit will automatically end your tax credits.

How do I claim tax credits?

If you want to make a claim, you can ring HM Revenue and Customs (HMRC).

You will need the following information in order to be given an estimate:

Your National Insurance number (if you have one)

Your income for the last tax year

Details of any benefits you get

Details of any childcare payments

The number of hours you work per week

HM Revenue and Customers can be contacted on 0345 300 3900, and are open from 8am-8pm Monday to Friday, and 8am to 4pm on Saturdays.

HMRC works out a provisional amount of tax credit, based on the previous tax year’s income and current circumstances.

Tax credit is then paid into the claimant’s bank account either once a week or four times a week until the end of the tax year.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.