Child Tax Credit (CTC) and Working Tax Credit (WTC) U.K vote facts and opinion

Child Tax Credit (CTC) and Working Tax Credit (WTC) 

Child Tax Credit (CTC) and Working Tax Credit (WTC) replaced Working Families’ Tax Credit, Disabled Person’s Tax Credit and Children’s Tax Credit in April 2003. CTC brings together income related support for children and for qualifying young people aged 16-19 who are in full time non-advanced education or approved training into a single tax credit, payable to the main carer. Families can claim whether or not the adults are in work.

WTC 

provides in work support for people on low incomes, with or without children. A family will normally be eligible for WTC if it contains one of the following:

• a single person who is responsible for a child or young person and works at least 16 hours a week
• a couple who are responsible for a child or young person, and who jointly work 24 hours or more per week (NB one adult must be working at least 16 hours)
• a person who is receiving or has recently received a qualifying sickness or disability related benefit and has a disability that puts them at a disadvantage of getting a job, and who works at least 16 hours per week
• a person is aged 60 or over and works at least 16 hours per week

If none of the above applies, then a person will still be eligible for WTC if they are aged 25 and over and work 30 hours or more a week. Tax credits are based on household circumstances and can be claimed jointly by members of a couple, or by singles. Entitlement is based on factors such as: age, income, hours worked, number and age of children, childcare costs and disabilities. MPs have backed government plans to cut spending on tax credits in the face of opposition from Labour and the SNP. The Commons approved plans to lower the earnings level above which tax credits are withdrawn from £6,420 to £3,850 and speed up the rate at which the benefit is lost as pay rises by 35 votes. Ministers say the move, estimated to save £4.4bn, is part of wider plans to raise pay and incentivise work.     Tax Credit applies to Working familes But Labour say it is an "ideological attack" on working families. The curbs on tax credits were announced in Chancellor George Osborne's post-election Budget in June. During a 90-minute debate in the Commons, the opposition claimed three million families face losing an average of £1,000 a year from next April. But ministers said the tax credit system had, for too long, been used to subsidise low pay and the changes would bring total expenditure on tax credits back down to more sustainable levels seen in 2007-8. 'Cynical' MPs backed a motion enacting the changes by 325 votes to 290.

Treasury minister Damian Hinds said eight out of 10 households would be better off by 2018-9 as a result of measures announced in the Budget to introduce a national living wage, further increase the personal tax allowance and extend childcare subsidies. "For too long in this country, low pay has been addressed not by genuine reform and driving productivity but by subsidising the tax credit system," he said. "The changes introduced in this order will build on the last parliament's reforms and return real-terms tax credit spending to the level it was in 2007-08 - a decade into the tenure into the government of the Labour Party." But Labour's Seema Malhotra said the changes were being "sneaked through the back door". "This is a political decision made by the chancellor that is set to see over three million families lose an average of £1,000 a year," the shadow Treasury minister said. "It is ideologically driven, it is cynical and it will directly increase levels of poverty in Britain." "It is part of an ongoing attack on the incomes of some of the most hard working families in our constituencies - those very strivers the chancellor purported to support."

Eligibility The calculator

Send tax credit renewal forms to HMRC’s Netherton office.

HM Revenue and Customs - Tax Credit Office

Comben HouseFarriers WayNethertonL75 1AXUnited Kingdom

Send changes of name or address, or complaints, to HMRC’s Preston office. Make it clear why you’re writing. For example, write ‘change of circumstances’ or ‘complaint’ at the top of your letter. You do not need to include a street name or PO box.

HM Revenue and Customs - Tax Credit Office

Preston PR1 4AT 
United Kingdom

Send new tax credits claims to HMRC’s Liverpool office. You do not need to include a street name or PO box.

HM Revenue and Customs - Tax Credit Office

Liverpool L75 1AZ
United Kingdom

Reality opinion

  Source

The challenge politically is that Working Families Tax Credit's keeps many families above the basic poverty line. For many the change will take families on low incomes into a poverty
With Utility costs rising above inflation and employers saying the market will not allow them to increase pay for staff the Tax Credit system has become a key solution. As the Tax credit system has an element connected to child care this will have to be factored into the decisions on Employment. This is likely to hit many families on lower incomes particularly the Younger families that will struggle