Tax and your children Tax credits
If you have kids, you could qualify for child tax credits
Tax credits don't reduce the amount of tax you pay; instead, they are means-tested benefits designed to provide extra money for people bringing up children, workers with a disability or workers on lower incomes. They are separate from Child Benefit, which is currently paid to all parents, irrespective of their income. This is due to change in 2013, when the government plans to restrict Child Benefit for higher rate taxpayers.
Working families tax credit and child tax credit
There are two types of tax credit: working tax credit (WTC) and child tax credit (CTC).
You might be eligible for one or both, but whether you qualify and how much you get depends on your household circumstances at the time you make the claim and your income in the previous year.
Rules for 2011-12
If you make or renew a claim in 2013-2014, it's the income you received between 6 April 2012 and 5 April 2013 that will initially be used to assess your award. This may be revised when your income for the current year is known.
For tax credits your entitlement depends on your household income, so if you're married, in a civil partnership or living together you're treated as a couple.
Benefit rule changes in October 2013
In October 2013, Universal Credit is due to replace Child tax credit and Working tax credit. It will also replace Income Support and Housing Benefit.
More help with tax credits
For more information on this, see our report on Tax Credits or go to the HMRC website.
If you need help with an issue concerning tax credits (or any tax issue) and you are on a low income and cannot afford to pay for professional advice TaxAid or the Low Incomes Tax Reform Group may be able to help.
- Tax query? Speak to our experts on the Which? Money Helpline
- Saving for your children? Take a look at our guide to Junior Isas
- Confused about childcare vouchers? Take a look at our guide
