FAQ
Frequently Asked Questions
Tax Credits and Child Benefit
How is my tax credit award calculated?
Your tax credit award is based on your individual and family circumstances, such as
- Your age
If you are responsible for a child or children, you must be aged over 16. If you are not responsible for a child or children, you must be aged over 25.
- Your income
Generally speaking, you can earn up to £41,300 (if you have children), £12,900 (if you are single without children) or £17,700 (if you are in a couple without children) per year before your tax credits are reduced or stopped. However, this may vary, depending upon circumstances.
- Your family
Whether you have children, and how many children live with you.
- Your marital status
Whether you are single or part of a couple
- Your employment status
Whether you are working, and your hours of work
- Childcare
Whether you pay for registered or approved childcare
- Disabilities
Whether you, or any dependent children, have a disability
Why have I been overpaid tax credits?
If your circumstances change and you do not inform HMRC of the change, you may end up being paid too much in tax credits. To avoid this happening, tell HMRC immediately if:
- Your income goes up
- Your working hours change so that you fall into a different band (0-15 hours, 16-29 hours, 30+ hours)
- Your childcare costs go down, you change childcare provider or you stop using a registered or approved childcare provider
- You were claiming as a single person and you start to live with someone as part of a couple
- You stop being responsible for a dependent child
- You leave the UK for more than eight weeks
This list is not exhaustive. It is advisable to let HMRC know as soon as possible of any change in circumstances. For more information see http://www.hmrc.gov.uk/taxcredits/keep-up-to-date/changes-affect/how-when-report.htm
How will my tax credit overpayment be paid back?
Once you have renewed your tax credits, you will receive a new award notice with details of any overpayment. If you are still eligible to receive tax credits, HMRC will reduce the payments due for the remainder of the award period in order to recover the amount overpaid. If you are no longer entitled to receive tax credits, HMRC will ask you to make a one-off payment to them directly for the amount overpaid. If repaying the overpayment is causing financial hardship and you are unable to meet your essential living costs, HMRC may agree to spread your repayments over a longer period of time. For more information, see [PDF] http://www.hmrc.gov.uk/leaflets/cop26.pdf
How often are tax credits paid?
Tax Credits can be paid weekly or four weekly.
How often is Child Benefit paid?
Child Benefit is usually paid every four weeks. However, if you are a lone parent and wish to have payment made weekly, contact the Child Benefit helpline on 0845 302 1444 and they can arrange this for you.
If you are part of a couple, are in receipt of certain out-of-work benefits and have been entitled to Child Benefit continuously since 15th March 1982 and have changed to four-weekly payments within the past 26 weeks then you may also be eligible to have your Child Benefit paid weekly. Contact the Child Benefit helpline for more information.
How much Child Benefit will I receive?
The current rate of Child Benefit is £20.30 per week for your first child and £13.40 per week for each subsequent child.
How are my Child Benefit and tax credits paid?
Child Benefit and Tax Credits will normally be paid by Direct Payment into a bank, building society, National Savings & Investments or Post Office account. Payment cannot be made into children’s accounts (including Child Trust Fund accounts), some mortgage accounts, business and building society passbook accounts and National Savings & Investments accounts other than the Investment Account and the Easy Access Savings Account. HMRC do not recommend having payment made into an ISA, since there is a maximum limit for payments being made into this type of account.
How do I know if I am eligible to receive Child Benefit?
If you are responsible for a child, you should be able to get Child Benefit for them. If your child does not live with you, you can still receive Child Benefit provided:
- You contribute towards their upkeep
- The amount you contribute is the same or greater than the amount of Child Benefit
- No other person is also claiming Child Benefit for the same child.
I share custody of my child with my ex-partner. Who should claim Child Benefit and Child Tax Credit?
Only one payment of Child Benefit and one payment of Child Tax Credit can be made in respect of a child. Normally, the person who is usually responsible for the child should claim.
If you share custody with another person, it is up to you and the other person to decide who should claim the Child Benefit and/or Child Tax Credit for your child or children. They do not have to be paid to the same person – i.e. one of you can receive the Child Benefit and the other can receive the Child Tax Credit, if you wish and can agree. If you and the other person are unable to reach an agreement about who the benefits should be paid to and two rival claims are made for the same child, HMRC will examine the facts of the case and will make a decision based on factors such as:
- The child’s registered address for school / college / nursery / childcare / healthcare
- Who has legal custody and where the child spends most time
- Where the child goes to school
- Where most of the child’s clothes, toys and belongings are kept
- Who is responsible for meeting the child’s health and hygiene needs
- Who is responsible for the child’s day to day spending e.g. providing food, clothing and pocket money.
Are tax credits and Child Benefit counted as income for other benefits?
In most cases the following is true:
- Child Benefit is not usually counted as income.
- Working Tax Credit is usually counted as income.
- Child Tax Credit is not usually counted as income, with the exception of Housing Benefit, which includes its own allowance for children.
Can I receive the Childcare Element of Working Tax Credit towards childcare which is not registered?
No. The Childcare Element of Working Tax Credit is only available towards the cost of qualifying childcare. That is,
- childcare which is registered or approved by a Health and Social Care Trust
- childcare provided by a school on school premises or provided by an Education and Library Board
- in some cases, childcare provided by a foster parent, in respect of a child whom the foster parent is not fostering.
HMRC will require you to provide your childcare provider’s registration number, if they have one, and/or their name and full address, so that they can confirm registration. HMRC will also carry out periodic ‘spot checks’ to ensure that the childcare still qualifies and that your costs are accurate.
Why do I need to renew my tax credit award?
You need to renew your tax credit award each year so that HMRC can assess your entitlement and address any underpayment or overpayment you may have received.
If you do not complete an annual tax credit renewal by the date specified (usually 31st July), your payments will stop.
Even if your circumstances have changed and you are no longer eligible to receive tax credits, it is important that you complete your annual renewal. This is because HMRC needs to assess whether any payments that you received between the start of the tax year (6th April) and the renewal date will need to be repaid.
How do I claim tax credits?
You need to request a tax credit claim form from HMRC’s Tax Credit helpline on 0845 300 3900.
How do I claim Child Benefit?
You need to complete a Child Benefit claim form. You should receive a Child Benefit claim form in the Bounty pack which you will receive from your midwife or maternity unit when your baby is born. Alternatively, you can request a form through our Tax and Benefits Freephone Helpline on 0800 988 2377, or directly with HMRC on 0845 302 1444.
At what age will my child stop being eligible for Child Benefit?
Child Benefit payments usually stop when your child turns 16, unless they are in approved education or training. Child Benefit is not payable once the child turns 20.
