New guide to tax credits
HMRC have published an updated version of the Child Tax Credit and Working Tax Credit leaflet (WTC2). The guide explains in detail what the two credits are, who is eligible and how to claim.
The Child Tax Credit is intended to help families with children; credits are available tofamilies with an income of up to £58,000 a year (£66,000 where the family includes a baby under one). The credit is intended to help support children until the age of between 16 and 20 depending on their education profile.
Child Tax Credit is paid directly to the main carer in the family either weekly or monthly and is usually paid directly to a designated bank or building society account.
The Working Tax Credit assists taxpayers on low incomes by providing top-up payments. This credit is available to employees and the self-employed on low incomes whether they have children or not. Low incomes for Tax Credit purposes include the self employed who have low or nil taxable income as a result of business losses, pension contributions or the Annual Investment Allowance.
For example, a single person without children, aged over 25 with taxable earnings or profits of up to £13,000 would be eligible for some credit. The limits are higher for couples and those with children. The credit is paid directly to a designated bank or building society account.