Entitlement to tax credits

By Tolley

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Entitlement to tax credits
  • Residence rules
  • Working tax credits
  • Child tax credits
  • Types of claim

Residence rules

To be eligible for tax credits, the individual must usually live in the UK ― that is England, Scotland, Wales or Northern Ireland. The UK does not include the Channel Islands or the Isle of Man.

TCA 2002, s 3

For claims made on or after 1 July 2014, the claimant must have been living in the UK for three consecutive months immediately prior to making the claim. This rule applies equally where the claim is backdated; the claimant must have been living in the UK for three consecutive months immediately prior to that earlier date. However, this three-month rule does not apply to individuals who entered the UK before 1 July 2014 or have UK refugee status. For a full list of exemptions, see the revenuebenefits website .

SI 2003/654, reg 3 (subscription sensitive)

A claim can continue during short absences from the UK of up to eight weeks a year, or up to 12 weeks where illness is a factor.

SI 2003/654, reg 4 (subscription sensitive); TCTM02040

The claimant must be present and ordinarily resident in the UK for the period of the claim. Although the term ‘ordinarily resident’ was generally abolished for tax purposes from 6 April 2013, the concept still exists for tax credits. The guidance for tax credit purposes describes this as normally residing in the UK (apart from temporary or occasional absences), and that residence in the UK has been adopted voluntarily and for settled purposes as part of the regular order of the claimant’s life for the time being.

TCA 2002, s 3(3); SI 2003/654, reg 3(1), (5) (subscription sensitive); TCM0128120

For good outline of the legal principles to be considered in determining ordinary residence for tax credit purposes, see Arthur.

Arthur v HMRC [2018] STC 1 at [16] (subscription sensitive)

In the case of

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