A tax credit is a financial benefit given by the government. Child Tax Credit is given to individuals to assist with the expenses associated with raising a child. Only a select few individuals may apply for the Child Tax Credit since Universal Credit will replace it.
What is Child Tax Credit?
HMRC provides child tax credits (CTC) to help households with children. It is paid separately from child benefits, and you can apply whether or not you are employed.
There is no assistance with childcare expenses included in the Child Tax Credit.
You may be eligible for the Working Tax Credit if you currently get tax credits and have a modest income while working. This benefit may include assistance with childcare expenses.
What Is Child Tax Benefit/Credit Made Up Of? What Are All Its Elements?
The table below details the various components/expenses that Child Tax Benefit may assist you with:
Child Tax Credit Elements | Explanation | Maximum Amount per year |
Family Element | The basic amount for households with one or more children | Up to £545 |
Child Element | For every child or teenager | Up to £2,935 |
Disability Elements | One for each child with a disability for whom you are accountable. | £3,545 (on top of the child element) |
Severe Disability Elements | One for each child you care for who gets the Disability Living Allowance’s Highest Rate Care Component. | £1,430 (on top of the child element and disabled child element) |
Even if you are aware that your child won’t be eligible for the child element, you should still notify HMRC that a new child is moving in with you to ensure that you don’t lose out on any associated benefits, such as the working tax credit’s childcare component or the child tax credit’s disability component.
What Is The Maximum Child Credit I Can Claim In the UK?
If your child or children were born before April 6, 2017, you might be eligible for child tax credits of up to £3,480 per year for the oldest child and up to £2,935 per year for each additional child up to the age of 16.
If they continue their education or training until they are 20, you may keep filing claims for them.
A child born after April 6, 2017, will not qualify for child tax credits unless it is the taxpayer’s first or second child. For every kid, you may get £2,935. There may be additional tax credit benefits if you have identical twins or triplets.
You may qualify for child tax credits even if you don’t work, and the amount you get will depend on your family’s financial situation.
Can I Claim Child Tax Credit As a Single Parent or Couple?
Only one of you may file for child tax credits if you share parental responsibilities, such as if you and your spouse are divorced. The person who is mainly in charge of the youngster should be this.
Even if one parent spends more money on child care, it doesn’t automatically make them the primary caregiver. The one who spends the most time with the kid should make a claim.
You must file a joint declaration with your partner if you’re married. You are considered a couple if you live together, are legally wed, or are in a civil partnership.
If you live apart but are still legally wed, you must file a joint claim. Except in the following cases, HMRC recognizes you as a couple:
- Divorced
- Legitimately divorced according to a judicial decree
- Permanently estranged, i.e., you have no intention of getting back together
For How Many Children Can I Claim Child Tax Credit?
The Two Child Limit means that you can only get more Child Tax Credit for your third (or more) child if: They were born before 6 April 2017. They are disabled (Disabled Child element only) You qualify for an exception in Child Tax Credit or special circumstances apply in Universal Credit.
It does not include child care subsidies, ported benefits (such as free school lunches), or special assistance for any children with disabilities all of which are available for any child you are in charge of.
There are exceptions, so you may still add one even if your kid was born after April 6, 2017, and you already got two or more child components. The exceptions consist of the following:
- A second or later kid born in multiple births but not the first
- Children who were probably conceived via rape or coercion
- Children who live with their families or friends for an extended period, even in informal arrangements when the kid would otherwise likely be cared for by the local authorities
When and How Are Child Tax Credit Payments Made?
All payments, including benefits, pensions, and allowances, are sent directly into an account (like a bank account) that belongs to the primary caregiver of the kid.
From the time you file your claim until the end of the tax year, you will get payments either weekly or every four weeks, provided that your situation does not change.
Looking for More Tax Credits and Benefits?
Tax credits are more advantageous than tax deductions since they decrease the total amount of tax owed rather than simply the income subject to taxation.
There are three primary categories of tax credits:
- Tax Credits that aren’t refundable
- Tax Credits that are refundable
- Tax Credits that are just partly refundable
Taxpayers get their entire refund when entitled to refundable credits, which is a significant benefit. You can owe no tax if you qualify for a non-refundable tax credit, but this credit cannot result in a tax refund.