– What are Tax Credits ?
Tax Credits are an extra financial assistance, funded by the government. This aid is accustomed for people with a low income or supporting children.
Two general types of Tax Credits are :
1. Working Tax Credits (WTC) – for people who have a lower income, and
2. Child Tax Credits (CTC) – for people who have at least one child in their keeping.
– Who is eligible to get tax credits ?
If a person is a citizen of UK and is dependent on at least one child, depending on his/her everyday income, may be eligible for Child Tax Credits. If a person is working on a low income, he/she may also be eligible for Working Tax Credits.
A set of assets determine the amount of benefits an individual can attain. These include:
-age of the person
-does the person has children
-how many hours does the person works,
-how much a person pays for childcare
-are there are any disabilities in the person’s family.
However, if a person’s everyday income is more than roughly £26,000, he/she is not likely to be eligible for any Tax Credits. Both tax credits are evaluated jointly
such that a person remains eligible for Child Tax Credits even if he/she has too much income to qualify for the Working Tax Credits.
– How are the payments done ?
After the privileges have been determined by the HMRC department( Her Majesty’s Revenue and Customs Dept.), the payment of money is done right into the person’s bank or building society account, every week or 4 weeks. However, a person must keep updating his/her information annually. If he/she fails to renew the details, credit payments will be stopped.
– HOW TO CLAIM TAX CREDITS ?
A person can claim tax credits by calling Tax Credits Helpline on 0845 300 3900 to get a claim form which may arrive in 2 weeks. If a person is already claiming the tax credits, he/she only needs to update their claim by calling at the helpline. One can’t download the form or fill it online.
A person needs to provide details of his/her income for the last year to the Tax Credit Office . This could be done between 6th April of an year to 5th April of the next.
In order to make a claim, one must have to submit the following details :
1. Income for the last tax year.
2. National Insurance number
3. Information about any other earnings for example rental income or pensions.
4. Childcare expenditure.
5. Information of any additional benefits you get for example a Career Allowance based on individual contribution etc.
If a person is married or living with a companion, they need to create a joint claim for tax credits. A single claim is only for those who don’t have any partner.
Those making a joint claim must know that while claiming child or working tax credits, one needs to decide who amongst the two is the main career. Only that person will be eligible to receive the money.