Working Tax Credit is a financial support system established to aid people who belong to the lower income group. The credit system is currently being replaced by Universal Credit as it has a wider scope. Nonetheless, the provision is still available to people who have been availing this in the past.
Can I apply for Working Tax Credit?
As of the present day, if one wants to apply for Working Tax Credit they cannot apply for the same. Instead, they will be asked to apply for Universal Credit system as it offers a wider coverage.
I was avail Working Tax Credit, can I still avail it?
If you were previously availing working tax credit, then you can still do the same. However, this will also depend on your present circumstance as compared to the time when you availed the facility.
What circumstances led to availability of Working Tax Credit?
The facility is available to those who have a change of circumstances under the given scenarios:
- Started working less than 16 hours a week
- Lost a job
- Having a child
How much can I avail under Working Tax Credit?
As per 2021/22 year, a person can avail up to 70% of the childcare cost for a given number of weeks. If you have one child and pay upto £175/week, then you can get up to £122.50/week as tax credit. On the other hand, if you have two or more children and pay upto £300/week, then you can get up to £210/week as tax credit.
Working Tax Credit during Covid pandemic
Given the current scenario, the Government has allowed a one-time payment of £500. The allocation will depend on your eligibility and will reach you on or before 23 April 2021.
Working Tax Credit and Furlough
As you may be aware, the furlough scheme has been extended till 30 September 2021. Under this scheme, even if your weekly working hours falls below 16, the Government will still consider it as above 16 and normal support would be offered. This means you’ll still be eligible for Working Tax Credit.
Impact of income change on tax credit
There are can two situations where your tax credit can change. The first situation is where your income increases. Under this situation, you need to inform the Tax Credit Officer about such increase and your tax credit amount shall be reduced/ eliminated, depending on the rise.
The second situation is where your income decreases. Under this situation as well, you need to inform the Tax Credit Officer about such decrease and your tax credit amount shall be increased accordingly.
Note: The income increase or income fall should be £2,500.