Child Tax Credit (CTC) was introduced on 6 April 2003 and is administered by the HM Revenue & Customs. It is an income-based credit, meaning that it is subject to 'means-testing'. It is for families who are in or out of work and who have responsibility for a child or children under 16, or under 20 if in approved education or training. It is not payable where a claimant or a partner is under 16 years of age, i.e., both must be aged at least 16.
CTC is paid by reference to an 'award period'. This usually reflects the tax year (6 April to the following 5 April), unless HMRC terminates it earlier. However, entitlement is calculated on the basis of daily, not annual, rates. You can be entitled to Tax Credits at different rates for different periods (known as 'relevant periods') during the course of the tax year. If this is the case, entitlement is calculated (or recalculated) separately for the numbers of days in each relevant period.
The amount of the CTC is made up of a number of elements - a family element, child element, disabled child element and severely disabled child element:
- Those entitled to CTC will get the family element. For the tax year 2019/2020 it is a maximum of £545, but this can be doubled where the family contains a child below one year of age.
- The rate of the child element for each child depends on the circumstances of the child in the family. The basic annual maximum for 2019/2020 is £2,780 and, in addition, there can be a maximum of £3,355 for each disabled child and a further maximum of £1,290 for each severely disabled child.
Payments of tax credit will be made directly into the claimants' nominated bank, or similar, account. It is awarded for a complete tax year and, while a claim made after April may run only from the date of claim to the end of the tax year, there are circumstances where limited backdating may be applied. It is important to keep the HM Revenue & Customs informed of any change in circumstances which might affect the amount of tax credit due in order to avoid any underpayment or overpayment.
CHANGES OF CIRCUMSTANCES
You must report the following changes in circumstances:
- A change to your status as a single person or couple.
- Your income goes down by more than £2,500 or goes up by more than £5,000.
- You benefits stop or go down.
- You move abroad.
- Your child care costs cease, go up, or go down by £10 per week or more.
- Your work hours change so that you no longer meet a 16 or 30 hours a week qualifying rule.
- You cease to be entitled to the 30-hour element.
- You stop being responsible for a child or qualifying young person, or one you are responsible for dies, or a qualifying young person stops counting as such e.g. because they leave college and start work.
You should report any changes in your income or benefits straight away. You must report other changes within one month of the change occurring or of you becoming aware of it. Failure to do so may result in a penalty.
A change of circumstances that increases your maximum child tax credit should be reported within three months to allow a full backdate.
Application packs for CTC are available from HM Revenue & Customs Enquiry Centres and Jobcentre Plus offices. Claim forms and further information can be obtained via the tax credit helpline on 0345 300 3900 (Textphone: 0345 300 3909).
Please Note - You can't claim Tax Credits and Universal Credit at the same time.
Further information about Child Tax Credit can be found here.
Whilst all the information given in this document was correct at the time of going to press, DIAL Doncaster cannot be held responsible for any subsequent changes.