Personal Tax

Computing child tax credit

Produced by Tolley
  • 19 Oct 2021 22:38

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

  • Computing child tax credit
  • Migration of tax credits to universal credit
  • Entitlement to the child tax credit
  • Elements of the child tax credit
  • Child element
  • Disabled child element
  • Severe disabled child enhancement element
  • Family element
  • Calculating the child tax credit

Computing child tax credit

Migration of tax credits to universal credit

New claims for tax credits are no longer possible as they have been replaced by the universal credit for all claimants. Existing claimants will continue to receive tax credits until they are migrated to the universal credit system. Migration will take place when a change in circumstances is reported.

See the Universal credit guidance note.

Entitlement to the child tax credit

A claimant(s) is entitled to make a claim for child tax credits (CTC) provided the child or qualifying young person ‘normally lives’ with them.

There is no statutory definition of the phrase ‘normally lives’ so it should be given its ordinary meaning. Essentially, for the child to ‘normally live’ with the claimant, the child has to live there for the majority of the time, allowing for temporary and occasional absences.

Where there is shared responsibility for the child or a qualifying young person and it is not clear or cannot be agreed who has the main responsibility for that child / young person, the factors that the Tax Credit Office will normally take into account in making the decision are:

  1. who the child or qualifying young person normally lives with and where they keep the majority of their belongings such as clothes and toys

  2. who is responsible for the day to day provision of clothes, food and pocket money

  3. who the main contact is for school / college / nursery / childcare

  4. who is responsible for the healthcare and hygiene of the child or qualifying young person, such as making appointments with the doctor / dentist and doing the child or qualifying young person’s laundry

  5. what the registered contact address is for the school / college / nursery / childcare / healthcare

  6. who has legal custody of the child or qualifying young person

TCTM02204

Other factors can be taken into account if significant.

Payment of child benefit is not relevant to tax credit status.

The child (or qualifying

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