Computing the working tax credit

By Tolley

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

  • Computing the working tax credit
  • Elements of WTC
  • Calculating the working tax credit
  • Childcare element

A claimant is entitled to make a claim for working tax credit (WTC) provided he satisfies the conditions of being in qualifying remunerative work and is physically present and ordinarily resident in the UK. See the Entitlement to tax credits guidance note.

There are a number of special rules that apply to EEA citizens that come to the UK but, for the purposes of this guidance note, it is assumed that the tests for claiming WTC have been met.

For more on EEA citizens, see the GOV.UK website:

  • WTC/FS5: Tax credits ― coming to the UK 
  • WTC/FS6: Tax credits ― leaving the UK 

TCTM02001 includes guidance on residence in the UK.

There is also helpful guidance on the revenuebenefits website , which is maintained by the Low Incomes Tax Reform Group and is supported by HMRC.

Elements of WTC

WTC is made up of a number of separate components, which are awarded depending on the personal circumstances of the claimant(s). It also includes a childcare element which is described at the end of this guidance note.

Basic element

Every claim for WTC will include at least the basic element of WTC (£1,960 for 2017/18 and 2018/19). In the case of joint claims, only one basic element is awarded.

SI 2002/2005, reg 4
Second adult element

Where there is a joint claim, the second adult element (£2,010 for 2017/18 and 2018/19) will be included.

SI 2002/2005, reg 11

The second adult element is not paid where neither of the claimants are responsible for a child or qualifying young person and:

More on Tax credits: