If you are a parent, then you know that raising children can be expensive. Luckily, the government offers tax credits to help offset some of the costs associated with child-rearing.
In this blog post, we will discuss Child Tax Credits in detail. We will cover everything from eligibility requirements to how to claim the credit.
So whether you are expecting your first child or have kids already, read on for information about Child Tax Credits!
What is Child Tax Credit?
Child Tax Credit is a tax credit available to parents or guardians of dependent children. The credit is designed to help offset the costs associated with raising children.
To be eligible for the credit, you must meet certain income requirements. The amount of the credit is based on your income and the number of qualifying children in your household.
Child Tax Credit was introduced in the United Kingdom in April 2003. The credit replaced the Working Families Tax Credit and the Disabled Person’s Tax Credit. The credit is available to families with an annual income of less than £50,000.
Income Requirements for Child Tax Credit
To be eligible for Child Tax Credit in the UK, you must have an annual income of less than £17,005. If you earn more than £17,005 you may still be eligible for a partial credit.
The amount of the credit is based on your income and the number of qualifying children in your household.
How to Claim Child Tax Credit in UK
The only way that you can qualify for Child Tax Credit is if you are already getting Working Tax Credit.
If you are eligible for Child Tax Credit, you can claim the credit by completing a self-assessment tax return. You will need to provide information about your income and the number of qualifying children in your household. Once you have completed the tax return, you will need to submit it to HMRC.
You can also claim the credit through your employer if you are employed and pay income tax through PAYE.
Changes to Child Tax Credit with Universal Credit
The Child Tax Credit is ending and is to be replaced by Universal Credit. Universal Credit is a new benefits system that is being introduced in the United Kingdom. The system will replace six existing benefits, including Child Tax Credit.
Universal Credit will be available to families with a monthly income of less than £800.
Universal Credit is for people who are on a low income; need help with living costs; are working (including self-employed or part time); are out of work or have a health condition that affects their ability to work.
If you are already getting Child Tax Credit, you do not need to do anything. You will be automatically moved to Universal Credit when it is introduced in your area. The rollout of Universal Credit is being phased in across the United Kingdom and is expected to be completed by 2023.
Is Child Tax Credit Available in Other Countries?
The Child Tax Credit is available in many countries around the world. Each country has its own income requirements and credit amount. To find out if the credit is available in your country, contact your local tax authority.
Child Tax Credits can help offset some of the costs associated with raising children. If you are a parent or guardian of a dependent child, be sure to research the credit and see if you are eligible.
And remember, if you have questions about your taxes, contact us today.
