Tax credits in the UK can be very confusing,in this blog post I have answered some of the questions that are asked about tax credit benefit system in the UK.

1. What is working tax credit?

Working tax credit is paid to support taxpayers that work and earn low income in the UK.

It’s not the same as Child benefit as it is usually assumed by most people.

It is based on your income and the hours that you work for in a tax year.

It can be claimed by both employed and self-employed individual in the UK.

The tax credit system has stopped taking new claims since February 2019.

So new claimants can only apply via the Universal credit system rather than the working tax-benefit system.

It will be replaced eventually by Universal credit by September 2024.

2.So, what is the Universal Credit?

The Universal credit just like the tax credit is a monthly payment that is made to low-income earners in the UK.

It’s not just replacing work tax credit, it’s replacing other benefits such as Child tax credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA).

3. Who qualifies for working tax credit /universal credit?

To qualify for working tax credit or the universal credit, you must meet the following condition:

Ideally you must be 18 years or over but under pension age.

In some certain cases, 16 or 17 years are allowed if they meet certain conditions.

You must be working, earning a low income or out of work but were previously working.

You must be living in the UK and not restricted by any immigration rules to receive public funds.

The taxpayer or their partners must not have more than £16,000 in savings between them.

4. Can I still claim Universal credit if I am not working in the UK?

It’s possible to claim working tax under universal credit whilst not working in the UK.

• You can make a claim if you meet any of the following circumstances
• You are in full-time education, single or living with an eligible partner and responsible for a child.
• When the taxpayer is disabled and entitled to Disability Living Allowance (DLA) or Personal Independence Payment (PIP) and have limited capability for work.
• A young person that is aged under 21 and is currently in further education.

This individual would not have any parental support or under local authority care

5.How much will I get from working tax credit?

A lot of factors are put into consideration when calculating the claim

Conditions such as 

If the taxpayer is a lone parent, couple element, disabled element, severe disability element, 30-hour element, or childcare element.

The claimant will have to attend an interview with the Jobcentre Plus.

6.How can I claim tax credit?

You will have to apply online to claim tax credits.

If you have a partner, you will have to do a joint claim.

The reason for this is because both of your incomes would be accessed.

If you are not comfortable using a computer or do not have access to a computer at home, you might be able to have access and support at the local jobcentre, council, library or citizen advice bureau.

7 How long does it take to receive first payment.

When a claim has been made online, it usually takes up to 5 weeks to receive the first payment.

If you are going through hardship, you can apply for an advance payment whilst your case is been considered.

Conclusion .

Thank you for reading my blog post on tax credits and the universal credit system in the UK.

The benefit system was created to support low income earners in the UK.

To ensure that you do not get overpaid from HMRC, you must inform them if there are any changes in circumstance.

If you would like to apply for the universal credit, kindly click here

Likewise, if you would like me to support you with your tax compliance issues, kindly contact me.