Child Tax Credit (CTC) can be claimed by anyone with children, regardless of whether you work or not. You may receive increased tax credits if you have a child with a disability.

This is because an extra amount is added to your tax credit calculation for each child who gets Disability Living Allowance (DLA) or who is registered blind. If your child gets the high rate DLA care component a further amount is also added.

What is the Working Tax Credit?

Working Tax Credit (WTC) can be claimed by families in work who are on relatively low incomes. In order to claim either you or your partner must be working for at least 16 hours per week.

WTC can sometimes include help with approved or registered childcare costs. Childcare costs can only be included for lone parents working at least 16 hours a week and for couples who are either both working 16 hours or where one partner works at least 16 hours and the other is incapacitated.

How much will I get in Tax Credits?

The amount of Tax Credits that you will get depends on your family’s circumstances (including the number of children) and on annual taxable income. Although Tax Credits are means tested, you can have a gross taxable income of up to £58,000 per year (£66,000 if you have a baby under 1) and still get some CTC. Unlike most other means tested benefits there is no capital limit. Contact a Family is producing a ‘ready reckoner’ to help parents predict likely tax credit entitlement. Please call the Contact a Family freephone helpline for further details.

How do I make a claim?

Both CTC and WTC are claimed on form TC600, available from your local Inland Revenue office or the Tax Credits Helpline on 0845 300 3900. Claims can also be made via the Inland Revenue website at https://www.taxcredits. inlandrevenue.gov.uk/Home.aspx. Couples must make a joint claim.

Can I claim Child Tax Credit if I am already getting Income Support?

Currently parents on Income Support (IS) or income based Job Seekers Allowance (ibJSA) can choose whether to claim CTC. If you do claim, any Tax Credits that you are paid will be deducted from your IS/ibJSA entitlement.

From April 2004, new IS/ibJSA claims will only include amounts for the claimant and any partner, with a separate CTC claim having to be made for children. All existing IS/ibJSA claimants will also have the amounts they receive for children transferred onto CTC during April 2004 – April 2005.

What happens if my circumstances change?

Once awarded, a Tax Credit award usually continues until the end of the tax year. The Inland Revenue then carry out a review to check you have been paid the correct amount. If you have been underpaid you will receive a lump sum as arrears. If you have been overpaid the Inland Revenue may seek to recover the excess (usually by reducing your award for the new tax year).

You can choose to tell the Inland Revenue about changes in income straightaway or leave it until the end of the tax year. If you wish to avoid overpayments or underpayments of Tax Credits, it may be in your interest to report significant increases or reductions as they happen.

There are two changes that you must report to the Inland Revenue within 3 months or risk a £300 fine - a change in the number of adults claiming (i.e. going from a couple to a lone parent or vice versa) or a reduction in childcare costs by £10 or more for at least 4 weeks. There is no obligation to disclose other changes in circumstances until the end of the tax year. However it may be in your interest to report some changes sooner. There is a 3 month backdating rule which means you may lose money if you delay in telling the Inland Revenue about a change that would increase your tax credit entitlement (e.g. the award of DLA to a child).

Contact a Family employ a welfare rights specialist who can provide advice on any aspect of Tax Credits. Please call the freephone helpline on 0808 808 3555 (weekdays 10am-4pm) or e-mail helpline@cafamily.org.uk