Working Tax Credit

What is Working Tax Credit?

Working tax credit is paid to people in who are treated as being in full time paid employment and are on a low income.

Who can claim Working Tax Credit?

You can receive Working Tax Credit (WTC) if you or your partner work a certain amount of hours a week and your income is low enough.

You do not need to have paid national insurance contributions to qualify.

The rules on the amount of hours you work to be eligible for WTC depend on your circumstances.

You must have the right to reside, be ordinarily a resident in the UK and meet the immigration conditions of the WTC to be eligible.

You count as being in full time work if any of the following apply:

  • You work at least 30 hours a week and are aged 25 or over, or:
  • You work at least 16 hours a week and:

(a) You have a physical or mental disability which puts you at a disadvantage in getting a job and you are in receipt of a qualifying benefit (Incapacity Benefit, Employment and Support Allowance, Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Statutory sick pay, Occupational sick pay, Income Support, National Insurance Credits, Industrial Injuries Disablement Benefit or Armed Forces Independence Payment, or

(b) You are aged 60 or over, or

(c) You are a single claimant responsible for a child or qualifying young person, or

(d) You are a member of a couple and either one of you is responsible for a child or qualifying young person. Your combined hours of work must not exceed 24 hours per week (so if one of you works 16 hours, the other one cannot work more than 8 hours per week).

A child is anyone under the age of 16. A qualifying young person is a person aged 16 – 20 and in full time non-advanced education or approved training.

Non advanced education includes courses up to and including GCSEs, A-Levels, Scottish highers, advance highers and NVQ/SVQ level 1 – 3.

University degrees, NVQ/SVQ level 4 and diplomas would be considered as advanced courses and this would prohibit the award of WTC.

What are the rates of Working Tax Credit?

When working out how much WTC you are entitled to, HMRC assess your income. If your income is low enough you will get the maximum amount of WTC. This will depend on your circumstances

The maximum amount of WTC you can get is calculated by adding together different elements which are based on your circumstances. These elements are:

(a) The basic element

This applies to anyone who is entitled to WTC.

(b) The second adult element

This applies if you're claiming as a member of a couple. You have to claim as a couple if you live with a partner. This includes same-sex partners as well as opposite-sex partners.

(c) The lone parent element

This applies if you are a single person responsible for a child or young person.

(d) The 30 hour element

This applies if you work 30 hours a week or more. If you're claiming as a couple with children, you can add your hours together to qualify for this element, but you'll only get one 30 hour element between you.

(e) The disability and severe disability elements

The disability element applies if you're disabled, get a ‘qualifying benefit’ and you work at least 16 hours a week.

You can get a disability element if your partner qualifies for it, or two disability elements if you both qualify.

‘Qualifying benefit’ means Disability Living Allowance, Attendance Allowance, Personal Independence Payment, Armed Forces Independence Payment, Industrial Injuries Disablement Benefit, War Disablement Pension or a Motability vehicle.

The severe disability element applies if you get the highest rate care component of Disability Living Allowance, the enhanced rate of the daily living component of Personal Independence Payment, the higher rate of Attendance Allowance, or Armed Forces independence Payment. You can also get the severe disability element for your partner, if they qualify.

(f) A childcare element 

This applies if you pay for childcare provided by a registered childminder, out-of-school club or other approved provider.
If your income is too high, this will affect the amount of WTC you can get.

The tax credit calculation is complicated. You can use an online questionnaire from HM Revenue and Customs (HMRC) to find out whether you qualify and how much you could get. Go to the HMRC website at: www.hmrc.gov.uk.

The maximum amount of WTC you can receive per year is:

Basic element: £1960

Second adult element: £2010

Lone parent element: £2010

30 hour element: £810

Disability element: £2970

Severe disability element: £1275

Childcare element: 70% of childcare costs, to a maximum of £122.50 per week for one child and £210 for two or more children.

Who administers Working Tax Credit?

HM Revenue and Customs (HMRC) administer WTC.

How do I claim Working Tax Credit?

To make a claim for WTC you need to phone the HMRC Tax Credits Helpline on 0345 300 3900 (textphone 0345 300 3909) and request an application form.

This form is called TC600.

This is the same form used to claim Child Tax Credit, and you should fill out all of the information on the form incase you are also entitled to Child Tax Credit.

Problems with Working Tax Credit

If you receive a decision you are unhappy with you can ask HMRC to explain their decision.

First published: Thursday 16 January 2014
Updated: Tuesday 29 November 2016