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Tax credits

Working tax credits: the basics

By Joe Elvin

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Working tax credits: the basics

Discover whether you're entitled to working tax credit and how much you may receive in 2017-18.

Working tax credits are a payment to help you top up your income. If you work a certain number of hours a week and have an income below a certain level, you could get up to £1960 a year. 

There are also a number of elements on top of this you might be eligible for, depending on your circumstances.

You can get working tax credit whether you're employed or self-employed.

Working tax credits eligibility in 2017-18 

How do you know if you qualify for working tax credits? Well, there are a number of criteria.

If you're single and don't have children you must:

  • work at least 30 hours a week
  • be 25 or older
  • be earning less than £13,253

If you're in a couple and don't have children you must:

  • work at least 30 hours a week
  • be 25 or older
  • be earning less than £18,023 jointly

However, if you're disabled and work, or if you have children you might be eligible for working tax credit if you earn more than this if:

  • you're 16 and over
  • you work at least 16 hours a week

Tax credits are due to be replaced by Universal Credit. It's not possible to get both. Find out more about Universal Credit on gov.uk. 

Working tax credits: how much will you get?

Working tax credit is made up of a number of different 'elements' or payments. You may be eligible for just one element or for a few different elements, depending on your family circumstances.

Everyone who qualifies for working tax credit receives the basic element. This is worth up to £1,960 during 2017-18, depending on your income.

In addition, you can receive extra elements depending on your circumstances, as we've shown in the table below.

The elements you are entitled to are added together. But HMRC reduces the amount you get the higher your income is.

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Working tax credit elements in 2017-18

Below are the different working tax credit elements and how much each element is worth in 2017-18:

Working tax credit
Working Tax Credit elements Maximum amount paid for 2017-18
Basic element – one per single claimant or couple £1,960
Couples’ and lone parents’ element (paid in addition to the basic element but only one Couples’ element allowed per couple £2,010
30 hour element (paid if you work 30 hours or more per week but only one element allowed per couple) £810
Disabled worker element. (a couple can receive two elements if both claimants are eligible) £2,970
Severe disability element (a couple can receive two elements if both claimants are eligible). £1,275
Childcare element, childcare for one child 70% of cost of childcare to a maximum of £175 a week
Childcare element, childcare for two or more children 70% of cost of childcare to a maximum of £300 a week

Childcare element of working tax credit

The childcare element of working tax credit is an extra allowance for working families who spend money on approved childcare. 

This includes:

  • a registered childminder, nursery or play-scheme
  • an out-of-hours club on school premises run by a school or local authority
  • a childcare scheme run by an approved provider

You can claim up to 70% of childcare costs to a maximum of £175 a week for one child, or £300 a week for two or more children.

Working tax credits income thresholds

An income threshold is the maximum amount of income you can receive before the amount you can receive is reduced.

The income threshold for receiving the maximum amount of working tax credit for your circumstances is £6,420. 

For every £1 of income over this threshold you earn per year, the amount of tax credits paid decreases by 41p. 

Working tax credit table if you have no children 

The table below shows how much working tax credit you may get for the tax year 2017-18 if you have no children. 

It includes the basic element of working tax credit and the 30 hours element (an extra payment of £810). 

Working Tax Credit - for people without children (2017-18)
Annual income Single person aged 25 or over working 30 hours or more a week Couple aged 25 or over working 30 hours or more a week
£6,420 £2,770 £4,780
£10,000 £1,305 £3,315
£11,000 £895 £2,905
£12,000 £485 £2,495
£13,000 £75 £2,085
£14,000 £0 £1,675
£15,000 £0 £1,265
£16,000 £0 £855
£17,000 £0 £445
£18,000 £0 £35

 Working tax credit and child tax credit

If you have children you're also eligible for:

  • the childcare element of working tax credit if you are paying for childcare
  • the single parents' element of working tax credit if you are raising your child by yourself
  • child tax credits

When  you apply for working tax credit, you'll be told if you can apply for child tax credits. You don't have to apply for them separately. 

To get the maximum amount of both working tax credits and child tax credits, your household income needs to be £6420 or less. After this point, your maximum award will reduce. 

Working tax credit and child tax credit table

The table below gives you an illustration of what you might receive. However, the amount you can get will differ according to your specific circumstances. 

The table includes:

  • the basic element, couple's element and 30 hour element of working tax credit
  • the family and child element for one child of child tax credit

It does not include:

  • the childcare or disability element of working tax credit
  • the disability element of child tax credit

Working Tax Credit and Child Tax Credit - for people with children (2017-18)
Household Income One Child Two Children Three Childrena
£6,420 £8,105 £10,885 £13,665
£10,000 £6,645 £9,425 £12,205
£15,000 £4,595 £7,375 £10,155
£20,000 £2,545 £5,325 £8,105
£25,000 £495 £3,275 £6,055
£30,000 £0 £1,225 £4,005
£35,000 £0 £0 £1,955
aAssumes your first born child is born after 6 April 2017

Find out more: how to calculate your tax credits, including case studies to help you

Reporting changes to your circumstances

It's important to keep HMRC up to date with changes to your income or family circumstances. 

Find out more: our guide to tax credits and changes in circumstances explains the important changes you must update HMRC about

  • Last updated: June 2017
  • Updated by: Joe Elvin
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