Computing the working tax credit

Produced by Tolley
Computing the working tax credit

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

  • Computing the working tax credit
  • Migration of tax credits to universal credit
  • Entitlement to working tax credits
  • Elements of working tax credit
  • Basic element
  • Second adult element
  • Lone parent element
  • Disability element
  • Severe disability element
  • 30-hour element
  • More...

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New claims for tax credits are no longer possible as they have been replaced by the universal credit for all claimants.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 working tax credits

A claimant is entitled to make a claim for working tax credit (WTC) provided the claimant 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:

  1. WTC/FS5: Tax credits ― coming to the UK

  2. 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 working tax credit

Working tax credit 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 working tax credit will include at least the basic element of working tax credit (£2,005 in 2021/22 and £3,040 in 2020/21 (following increase to support the country during the coronavirus (COVID-19) pandemic)). In the case of joint claims, only one basic element is awarded.

Second adult element

Where there is a joint claim, the second adult eleme

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