Tax Credits - What are they all about?
Have you or someone you know, seen a decrease in your income in recent times? If so, you may be entitled to tax credits.
What are tax credits?
Tax credits are regular payments made by the government into your bank account to assist families raising children and/or working people on low incomes. There are two types of tax credit; child tax credits and working tax credits.
Who is entitled to tax credits?
Anyone can claim tax credits as long as they meet certain criteria:
Child tax credits
- Parent has to be over 16
- The child or children you are claiming for must be under 16 or under 20 if in approved education or training
Working tax credits
- Work at least 16 hours if single
- Work 24 hours a week if a couple with kids
- Work 30 hours with no children
How much money do you receive?
The amount of money you will receive will depend on your circumstances. The basic payment for a single claimant or a joint claim by a couple, of working tax credits is £1,960 for the tax year 2016/17. You can then receive extra, if you work over 30 hours and/or have a disability.
You will be entitled to full tax credits if your income is £6,420 or less. This income threshold remains the same if it is a joint claim, it is not doubled. For every additional £1 earned above £6,420, you will lose 41p your of tax credit award.
How to claim
For a new claimant you can order a tax credit form at any time, you will be asked the following information:
- National Insurance number
- Income for the last tax year
- Details of any taxable benefits you receive
- Details of any childcare payments to a registered childminder
- Number of hours you work per week
Usually, tax credits are backdated by up to one month from the start of claim.
For those already claiming tax credits make sure you renew them before 31 July 2016 or you could lose them.
Tax credits are very specific to individuals circumstances, hence, if you are on a low income and would like to see if you are eligible to tax credits, or want to find out if you are receiving the right level of tax credits, please do not hesitate to contact Maria Haughey on 028 87752990.
Whilst every effort has been made by CavanaghKelly to ensure the accuracy of the information here, it cannot be guaranteed and neither CavanaghKelly nor any related entity shall have liability to any person who relies on the information herein. Information given here is for guidance only. Detailed professional advice should be taken before acting on any information contained herein. If having read the guidance here, you would like to discuss further; a member of our team would be pleased to help you.