What are tax credits and how can I claim them?

Do you know if you are entitled to a tax credit? A tax credit is a non-taxable benefit paid by the government. GoSimpleTax is here to help save you money on your taxes, and today, we’re going…

5 Minute Read

Last Updated: 9th May 2022

Do you know if you are entitled to a tax credit? A tax credit is a non-taxable benefit paid by the government. GoSimpleTax is here to help save you money on your taxes, and today, we’re going to explain different types of tax credits that you might be entitled to.

What are tax credits?

There are two types of tax credit; the child tax credit and the working tax credit.

  • Child tax credit – If you are responsible for the care of a child, then you may be entitled to a child tax credit.
  • Working tax credit – This is based on how much you earn and the hours you work for. Unpaid or voluntary work does not count.

Who qualifies for tax credits?

The limits for receiving tax credits are specific, and differ considerably depending on personal circumstances. You will only qualify to receive benefits if your income falls into certain brackets.

To put it simply, you can receive tax credits if:

  • You have 1 child and earn below £26,000
  • You have 2 children and earn below £32,000
  • You’re single, have no children and earn below £13,000
  • You’re in a relationship, you have children and earn below £18,000

This is a very basic overview of the tax credit guidelines, and these rules do not apply to everyone. Some taxpayers don’t fall between any of these categories, for example, if you have more children or you or your child has a disability. For these exceptional cases, the income bracket is likely to be lower, and the benefits are likely to be higher.

How much can I get?

The amount of tax credits you are likely to receive is dependent on:

  • The number of children living in your care
  • Your relationship status (single or couple)
  • Your job (the number of hours you work and the amount you earn)
  • Whether you pay for childcare
  • If anyone in your household has a disability

How can I claim tax credits?

Unfortunately, tax credits cannot be claimed online. In order to claim tax credits, you must fill in a paper claim form, which is available from the tax credit helpline. Additionally, if you live with someone else, you must make a joint claim. As soon as you think you can qualify for either or both credits, you should make a claim straight away. If you don’t claim quickly, you could lose out on a lot of money.

Whether you qualify for tax credits or not, GoSimpleTax is always here to answer any of your tax-related questions. Whether you’re a first-time filer or a seasoned pro, we can help you file your tax return without the hassle of HMRC.

Access GoSimpleTax and discover a new free way of filing your return (HMRC approved), know what expenses will help you lower your tax bill and keep all your records online, safe & sound. Ready to file with one click! Free means free. No hidden costs.

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Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.


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