Working Tax Credit 


Working Tax Credit (WTC) is paid to those who work but are on a low income. UC is gradually replacing WTC, along with other benefits and tax credits. If you are in a UC area you cannot make a new claim for WTC, and you cannot claim for WTC and UC at the same time. For more information about UC see Chapter 1.


A claim for WTC is based on your age and the hours you work and get paid for, or expect to be paid for, as either an employee or a self-employed individual. How much you get also depends on your income and circumstances. 


You must be aged 16 or over to qualify. You must be aged 25 or over if you do not have children or a disability.


You may not qualify for tax credits if your household income is more than £26,100 a year and there is one child in the family. 


You may be able to get tax credits if your income is less than £32,900 a year and you have two children.


However, you could still qualify even if your income is above these amounts, for example, if you pay for registered or approved childcare, have more children, are disabled, or your child has a disability.


To check whether you qualify use the online tax credits calculator (www.gov.uk/tax-credits-calculator) to get a more accurate result, or call the Tax Credit helpline 0345 300 3900. Although the helpline directs you to online information, you can “hold” to speak to an advisor.


If you are responsible for any children under 16, you could get the Child Tax Credit (CTC) element of WTC. You may also qualify for CTCs if you have children aged 16 to 19, as long as they are in certain types of education or training. See Chapter 5 for more information on CTCs.


The maximum WTC rates, thresholds and withdrawal rates for 2018-19 are shown in the tables below. 


Income thresholds are the amount of (gross) income that a household can keep before additional earnings begin to affect their entitlement to tax credits. Withdrawal (or taper) rates are the rate at which any additional earnings (over the level of income thresholds) reduce benefit entitlements. If gross annual income exceeds the first threshold of £6,420 (2018-2019) then the first (and main) withdrawal rate is 41%. This means that for every £1 earned above the threshold, 41p of the WTC entitlement is withdrawn.


How many hours do you need to work in order to claim WTC?


If you do not have children, you need to work the following hours to get WTC:


• if you are aged 25-59, you need to do paid work of at least 30 hours a week;


• if you have a disability you need to do paid work of at least 16 hours a week;


• if you are aged 60 or over, you need to do paid work of at least 16 hours a week.


If you have children, you need to work the following hours to get WTC:


• if you are single, you need to do paid work of at least 16 hours a week;


• if you are in a couple, your joint paid working hours usually need to be at least 24 a week, with one of you working at least 16 hours a week.


If you are a couple and only one of you is working, that person will usually need to work at least 24 hours a week. 


If your joint working hours are less than 24 hours a week, you can still get WTC if one of the following applies:


• one of you is aged 60 or over and working at least 16 hours a week;


• you work at least 16 hours a week and your partner receives certain benefits because of disability or ill health, or is entitled to Carer’s Allowance, or is in hospital or prison.


The work must last at least four weeks (or be expected to last four weeks) and must be paid. Payment in kind (for example farm produce for a farm labourer) and expected payment can be included.