Working Tax Credit is designed to top up your earnings if you work and are on a low income. But it’s being replaced and most people now have to claim Universal Credit instead. If you get Working Tax Credit, find out how this change affects you.
Universal Credit and Working Tax Credit
Unlike Working Tax Credits, there are no limits to the hours you can work on Universal Credit.
Find out more in our guide Universal Credit explained
If you’re already getting Working Tax Credit
Are you already claiming Working Tax Credit? Then how and when you move to Universal Credit depends on if you have to make a new claim because of a change in circumstances.
Tax credits and a change in circumstances
You must tell HMRC (the government department that issues Tax Credits) within 30 days if you have a change of circumstances. This could be:
- losing a job
- having a child
- starting to work fewer than 16 hours a week.
Help to Save
If you’re on Working Tax Credit, a Help to Save account gives you up to a 50% bonus from the government on your savings.
Find out more in our guide Help to Save explained
This might mean you’ll have to make a new claim for Universal Credit. HMRC will tell you what you need to do.
Call the Tax Credit Helpline on 0345 300 3900 to let them know about any changes to your circumstances.
Find out more in our guide How will moving to Universal Credit affect me?
Citizens Advice Help to Claim service
If you’re claiming Universal Credit for the first time, Citizens Advice Help to Claim service is free and confidential. They can help you:
- check if you’re entitled to Universal Credit
- get your important paperwork and documents together to speed up your application
- fill out your application online.
England and Wales
For more details, and to find your nearest branch visit Citizens Advice
Or in England, call 0800 144 8444 and Wales, call 0800 024 1220
Scotland
Visit Citizens Advice Scotland or call 0800 023 2581
Northern Ireland
Universal Credit works differently. Find out more at nidirect
Working Tax Credit and help with childcare costs
Are you getting Working Tax Credit, work at least 16 hours a week and pay for childcare? Then you might be able to claim the ‘childcare element’ of Working Tax Credit. This will help with up to 70% of your childcare costs.
- if you’re in a couple, you need to be working at least 16 hours each to qualify
- you can be eligible if you’re employed or self-employed
Help with the cost of living
Worrying about money because of rising rents, high energy bills or debt? If so, we're here to help.
Take the first steps to find your way forward with our guides to help you with the cost of living
In most cases, you must use registered or approved childcare. This can include childminders, playgroups and nurseries.
Find out more about getting help paying for childcare at GOV.UKOpens in a new window
How much can you get?
With the childcare element, you can get help with up to 70% of your childcare costs. This is up to certain maximum weekly limits.
| Number of children | If you pay up to: | You could get up to: |
|---|---|---|
|
One |
£175 a week |
£122.50 a week |
|
Two or more |
£300 a week |
£210 a week |
If you pay more than this for childcare, you’ll still only get the maximum amount shown above.
If you qualify for the childcare element, you won’t necessarily get the full amounts.
How much you get will depend on:
- your income
- the hours you work
- your childcare costs.
If you’re already claiming tax credits, call the Tax Credit Helpline to update your claim.
Call the Tax Credit helpline
Call 0345 300 3900 or write to the Tax Credit Office to tell them you’re now claiming Universal Credit. Find out more at GOV.UKOpens in a new window
Keeping your tax credits up to date
You need to renew your tax credits claim by 31 July every year if you want to keep getting them.
HMRC will write to you to telling you what you need to do to renew your tax credits.
If your circumstances change at any time during the year, call HMRC on 0345 300 3900 to let them know. For example, if your income changes, your child leaves home or you move house.
Changes in your circumstances can affect the amount of money you get, or mean you have to make a new claim for Universal Credit.
Find out more about changes that affect your tax credits at GOV.UK Opens in a new window
Tax credits and income changes
Important
There are other changes of circumstances you might need to report to HMRC other than income changes.
Find out more at GOV.UK
The amount your income can change before you have to tell HMRC is £2,500. This is called the income disregard.
If your income goes up
If your income goes up by £2,500 or more and you delay telling HMRC, or wait until the next time your claim is due to be re-assessed, you might find you’ve been overpaid tax credits.
You’ll be asked to pay this extra money back. This will be either by reducing your future tax credits or by direct payments if your tax credits have stopped.
To avoid a bill, it’s even more important to tell HMRC within 30 days of when you get the extra money.
It’ll be easier for your tax credits to be adjusted, and decrease the chance you’ll be chased for overpayments at later.
If your income goes down
If your income falls by £2,500 or more, you might be entitled to more tax credits, or be asked to claim Universal Credit.
Tell HMRC as soon as possible about your change of circumstances.
Is your household income getting squeezed?
If you’re facing higher living costs, but have little or no extra money coming in, find out about extra sources of income and support available to help you manage your household bills and save money in our guide Living on a squeezed income
If you’re overpaid tax credits
If you’re asked to repay tax credits and will struggle to pay, speak to HMRC as soon as you can.
Keeping your tax credits up to date
You need to renew your tax credits claim by 31 July every year if you want to keep getting them.
