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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 top up the earnings of lower-paid workers and workers with a disability.

Generally speaking, you must work at least 30 hours a week, be 25 or older and be earning less than £13,253 if you're single and childless. Alternatively you must be earning less than £18,023 jointly if you are part of a couple, childless but working at least 30 hours a week. 

However, if you are disabled and work or have children, you may be eligible for working tax credit if you earn more than this, provided you're aged 16 or over and work at last 16 hours a week.

NOTE: Tax Credits are due to be replaced by Universal Credit. Transitional arrangements will apply. Full details have yet to be announced.

Working tax credits: how much will you get?

Just like child tax credits, 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, worth up to £1,960 during 2017-18, depending on your income.

In addition, you can receive extra elements depending on your circumstances. So, for example, couples and lone parents get up to an extra £2,010; people who work more than 30 hours a week up to an extra £810; and disabled workers up to £2,970.

Again, the elements you are entitled to are added together but your maximum award is reduced the more you earn.

Working tax credit elements

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

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, or 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: what might you get?

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.

The tables below show how much tax credit you may get for the tax year 2017-18 based on your annual income. 

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 - 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

 

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