Working Tax Credit (WTC) is a means-tested benefit for people on low incomes who are in work. It was one of the original tax credits introduced by HMRC. While new claims for Working Tax Credit are generally no longer possible (Universal Credit has replaced it for most new claimants), many existing claimants continue to receive it and need to manage their award carefully.
Who can still receive Working Tax Credit
If you are already receiving Working Tax Credit and have not been moved to Universal Credit, you may continue to receive it until HMRC contacts you about managed migration. People in some specific circumstances — including those over State Pension age — may have different rules. If you are unsure of your status, contact HMRC or speak with Citizens Advice.
What Working Tax Credit covers
WTC includes a basic element, a couples element for joint claims, a lone parent element, a 30-hour element for those working longer hours, a disability element, and a childcare element for eligible costs. The total award depends on income, hours worked, and household circumstances.
How income changes affect your award
Working Tax Credit is income-based. If your income rises or your hours change significantly, your award may be reduced or removed. You are required to report changes in circumstances to HMRC within 30 days. Failing to report changes can lead to overpayments that HMRC will ask you to repay.
What happens when you are moved to Universal Credit
HMRC is gradually moving remaining tax credit recipients to Universal Credit through a process called managed migration. You will receive a migration notice giving you a deadline to claim UC. It is important not to ignore this notice — if you miss the deadline, your tax credit payments stop and you must make a new claim for Universal Credit from scratch.
How Ask Fin can help
The Benefits Checker in Ask Fin can help you understand which benefits you might be entitled to given your current circumstances, and can highlight entitlements you may not have considered.
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Ask Fin provides general guidance only. Benefit entitlement depends on individual circumstances. For personalised guidance, speak with Citizens Advice or a benefits adviser.