Claiming Tax Credits: How to Apply for the Child and Working Tax Credits

Eligibility

The government says it wants to help people struggling financially during the coronavirus pandemic. But some experts say there are many ways to qualify for the Working Tax Credit, including earning too much money.

You must earn less than £3,400 ($4,300) per month in gross salary to be eligible for Working Tax Credit. If you do earn over £3,400, you can still qualify for Working Tax Credit if you’re single, and earn up to £6,500 ($8,200). For couples, the threshold is £7,800 ($10,100).

If you already receive Child Tax Credits, you cannot claim Working Tax Credit. However, you could still receive Child Tax Credit if you earn under £1,600 ($2,100) per month in gross income.

You can only make a claim for Universal Credit if you aren’t receiving either Working Tax Credit or Child tax credit.

Hours you work

The government says it’s possible to claim Working Tax Credit even if you don’t meet the above criteria.

If you do qualify for Working Tax Credit, you’ll receive payments every fortnight based on how many hours you’ve worked each day.

In addition to claiming Working Tax Credit, you could also use the Child Care Benefit if you’re eligible.

Couples with at least one kid are exempt.

If you work less than 24 hours per week, you might qualify for an exemption under the Childcare Expenses Deduction Scheme. This scheme allows parents to claim £3,000 off their income tax bill each year if they are working fewer than 24 hours per week. However, it doesn’t apply to everyone – just those whose partners earn less than £50,000 per annum.

You don’t have to pay income tax on the money you’ve saved up for childcare expenses. But you do have to declare the amount you spend on childcare.

The rules say that anyone claiming the deduction must meet three criteria:

1. They must have paid childcare costs for themselves and another person;

2. Their partner must be incapacitated, disabled, or in hospital or jail; or

3. One parent must be caring for children aged 0 to 15 while the other works less than 24 hours per day.

This includes people looking after grandchildren, nieces and nephews, or foster children.

In addition, you cannot claim the deduction if you’re married to someone who earns over £50,000 per year.

If you’re eligible for the exemption, you’ll see a deduction of £3,000 on your annual tax return.

What counts as work

The government wants to make sure people are working hard enough to receive Working Tax Credit benefits. But how do we know whether someone is really doing it? And what about those who aren’t paid hourly wages?

To qualify for Working Tax Credit you must work at least 20 hours per week. This includes self employed workers.

You don’t need to pay income tax on earnings over £6,420 if your annual salary is under £100,000.

If you’re single with one or more children and earning under £50,000 a yr, you can claim Working Credit.

If you’re self-employed

Self employment doesn’t always mean making money. You might make some money, but it isn’t guaranteed. And even if you do make money, there are ways to lose money too.

If you have an unprofiable business, you could lose Tax Credits.

Your business needs to be profitable, before you can claim tax credit.

Your pay

The EU’s working time directive says that workers are entitled to rest breaks every eight hours, and employers must provide food and drink during those breaks. But what about the money? How much does a worker actually earn?

We wanted to find out whether there is a difference in pay between different types of workers – migrants vs. nationals. We found that the average hourly wage for a migrant worker is €10.25 compared to €11.50 for a national worker. However, we also discovered that some workers get less than the minimum wage.

In our research, we looked at data from the European Union’s statistics office Eurostat. We collected information on wages across 28 countries including Germany, France, Poland, Spain, Italy and Greece.

Our findings show that workers in agriculture, construction and domestic services are among the lowest earners. In fact, one person in five earns just above the minimum wage.

This includes agricultural workers whose average hourly wage is €7.90. Construction workers make around €8.00 per hour. Domestic helpers get slightly better rates at €9.30 per hour.

However, many migrant workers don’t receive the minimum wage. Migrants in hospitality and care work earn €6.70 per hour, while cleaners and waiters take home €5.50 per hour.

Exceptions

The term “paid work” refers to any money paid for services performed. Paid work includes any money you receive for services rendered. For example, if you’re hired to paint someone’s house, you’ll likely be considered to be earning paid work even though you don’t actually perform any painting. If you’re hired to clean up after a party, you’ll likely be deemed to be performing paid work since you’d be cleaning up after others.

However, there are some exceptions to this rule. Some jobs aren’t considered paid work because they fall into one of the following categories:

• Gambling – You earn money based on how well you play cards, dice, etc.

• Gift – Someone gives you money without expecting anything in return.

• Trust Fund – Money is set aside for you in advance, such as when you inherit money from a relative.

If you’re working in prison, you’ll probably be considered to be performing paid work. Even if you’re serving out your sentence, you’ll still be considered to be performing work. In fact, many states require prisoners to work while incarcerated.

Your income

There is no set limit for how much money you can make. You do not need to work full time to qualify. However, there are some limits on what you can earn. If you are single, you cannot earn more than £16,600 per year. If you are married, you cannot earn more that £19,400 per year. If you have children, you can claim Child Benefit for each one up to age 18. This applies even if you don’t pay tax.

If you earn over £16,631, you will be eligible for Working Tax Credits. These help people like you who want to work but do not earn enough to meet the threshold.

Frequently Asked Questions

What constitutes a couple for the purposes of working tax credits?

If you’re in a relationship and both of you work, it might seem like a no brainer – just add up how much money each person earns and apply for Working Tax Credit. But there are some rules about who counts as a couple for WTC purposes.

The main rule is that you count as a couple if you’re married or in a civil union, or if you live with someone else. This includes couples where one person lives with another because they’ve been living together for three months or longer. However, if you’re legally separated under a court decree, you don’t count as a couple.

There are also some exceptions to this rule. For example, if you’ve been living apart for six months or more, you don’ t count as a couple. And if you’re in an unmarried de facto relationship, you don’ re count as a couple. There are also certain circumstances where you might qualify as a single parent even though you’re in the same household as your child.

HM Revenue & Customs says there are around 11 million households in Britain where the head of the family works and the second earner doesn’t. They estimate that around 3 million people could be affected by the changes to WTC.

Who counts as responsible for a child or young person

If you’re paying Child Tax Credit, it’s important to know who qualifies as a “responsible adult”. A responsible adult must meet certain criteria – such as being over 18, having lived with you for most of the previous 12 months, and being involved in childcare arrangements.

A responsible adult doesn’t necessarily mean someone who lives with you all the time, but rather someone who shares responsibility for the child. For example, if you split up with your partner but still share responsibility for the children, you could both qualify as responsible adults. However, if you’ve moved into separate accommodation and don’t share responsibility for the children anymore, neither of you can claim tax credit.