HM Working Tax credits
The HM Working Tax Credit system has changed from 6th April 2012, as you will probably know from the news and the latest budget.
To find out if you still qualify for child tax credits or working tax credits from the inland revenue, here is the latest information.
Before April 2012, you could usually get some Child Tax Credit, as long as your income was not over the limit of £41,300, From the 6th April 2012 this limit has gone down for most people, meaning less people will qualify.
As with all tax related systems, A simple black and white answer as to whether or not you will qualify is not possible but as a rough guide, here are the latest bullet points relating to HMRC Tax credits for 2012 – 2013.
- The income limit for you now depends on your own individual circumstances, you might not get Child Tax Credit from 6 April 2012 if:
you have one child, and your annual income is more than around £26,000
you have two children, and your annual income is more than around £32,200. But it’s important to know that:
the income limit for you may be different, as it depends on your own circumstances, Some examples of things which could affect your income limit are:
- Having more than one or two children.
- Having approved or registered childcare.
- disability of yourself or your children.
Couples with children – new working hours rules for Working Tax Credit
Before April 2012, couples responsible for children, with one partner working at least 16 hours a week could get Working Tax Credit.
From 6 April 2012, the rules for couples with children have changed. Single people who are responsible for children (for example single parents) are not affected by the new rules.
If you’re a couple with children, your joint working hours now usually need to be at least 24 a week to qualify.
if you both work your joint weekly hours must be at least 24, with one of you working at least 16 hours a week
if only one of you works, that person must be working at least 24 hours a week
If neither of these apply, your Working Tax Credit will have stopped from 6 April 2012.
But there are some exceptions to these rules.
- If one of you is aged 60 or over, You’ll qualify for Working Tax Credit as long as the person who’s 60 or over works at least 16 hours a week.
- If one of you gets extra Working Tax Credit because of a disability, and they work at least 16 hours a week and they qualify for the ‘disability element’ of Working Tax Credit.
- If one of you is ill, an inpatient in hospital or in prison, you may still qualify if one of you works 16 or more hours per week.
- If one of you is entitled to Carer’s Allowance. You’ll qualify for Working Tax Credit if one of you works 16 hours a week or more, and the other is entitled to Carer’s Allowance. or receives an alternate benefit.
If your income drops this may or may not affect your tax credits for 2012.
Before April 2012, if your annual income for the current tax year went down, you could often get extra tax credits for the current year. A tax year runs from 6 April one year to 5 April the next.
From 6 April 2012, if your income goes down it might not affect your payments until the following year. But this depends on how much your income has gone down by.
- If your income goes down in the current tax year by £2,500 or less, Your payments won’t change for the current tax year.
- If your income goes down in the current tax year by more than £2,500, The HMRC Tax Credit Office will re-work your tax credits. But they will ignore the first £2,500 of the reduction. They will take the full amount of the reduction into account when they work out what to pay you for next year.
Changes to how far payments can be backdated, From 6 April 2012 this period has reduced to one month. Now, when the Tax Credit Office receives your claim, they’ll only be able to backdate it by up to one month as opposed to the previous three months, so you should not delay in making any claims.
Reporting changes, the same one month limit applies to reporting changes in your circumstances, so again you should not delay in informing th HMRC.
If you got the ’50-plus element’ – this has ended, if you are not responsible for any children, you now need to work at least 30 hours a week to still qualify for the over 50′s, for the over 60′s the limit is 16 hours a week.
Tax credit rates, There have been changes to some of the tax credits rates. One of these is that the maximum amount of the child element of Child Tax Credit has gone up from £2,555 to £2,690.
For the latest HMRC Tax credit rates click below: