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Tax Credits

Did you know that if you are a Small Business Start up, sole trader you may be able to claim Tax Credits depending on your forecast or actual performance.


At Blondie’s Accountants in Manchester we will make sure that you get everything you are entitled to.


Many of our clients receive over £2000 a year direct to their bank.


More than six million families and 600,000 workers on a low income collect tax credits, the
system relaunched by Gordon Brown in 2003 to alleviate poverty. Here is a guide to the scheme.


What are tax credits?


Tax Credits  are payments from the Government that are designed to supplement the salary of families and people on low incomes. It is paid directly into a bank account, either weekly or monthly.


Do you qualify?


If you look after one child or more at home, then you could qualify. In fact, nine out of ten families are eligible for the  child tax credit . Likewise, if you are over 25, working more than 30 hours a week and earn less than £12,800, you will also probably qualify for the working tax credit.


The amount of extra money you can receive from the Government in tax credits depends on a number of factors. These include your income,  the number of hours you work,, how many children you look after and whether any of your children have a disability. If you are over 50 and beginning work after being on benefits, you can also claim in  some circumstances.


Jobs that pay cash in hand, or where payment is in a form other than cash, still qualify as work under the scheme.


How much will you receive?


The calculations are incredibly complicated and there are a number of different elements that will effect how much you collect from the Government.


The maximum amount in the basic element of the  working tax credit  for the tax year 2009-10 is £1,890, but the higher your income the less you will receive.


The maximum amount in the basic family element of  child tax credit  is £545, plus £2,035 for each chilld. However, you qualify for more if you have disabled or severely disabled children.


How do the credits work?


HM Revenue & Customs will  pay tax credits  into any bank of building society account, Post Office® or National Savings & Investments account - as long as it accepts Direct Payment - either weekly or every four weeks.


If you  live with a partner or are married you should claim jointly. However, only one parent or partner can claim for child tax credits, so you will need to decide who would like to make the claim.


The amount that you receive is based on your circumstances at the beginning of the financial year on April 5, 2008. During March, April and May each year the Revenue will ask claimants to update their details, such as their salary. However, if you are receiving tax credits  you should keep the revenue updated throughout the year of any changes that affect the qualifying criteria, such as working hours or salary.


How do you apply?


Contact the tax credit helpline for an application pack. The application form for your first claim of either the working or child tax credit is Form TC600. The helpline number is 0845 3003900 (text phone 0845 3003909) and calls cost the same as a local telephone call. The application pack is also available from HM Revenue & Customs centres, benefit offices and Jobcentre Plus offices.

 

 

 

2010/11
£

2009/10
£

Working Tax Credit

 

 

Basic element - max.

1,920

1,890

Childcare element  
80% of eligible costs up to £175 per week (£300 if two or more children).

Child Tax Credit (CTC)

 

 

Child element per child - max.

2,300

2,235

Family element

545

545

Baby addition

545

545


Reductions in maximum rates


39% of income above £6,420* p.a.


*If only CTC is claimed, the threshold is £16,190 (£16,040) p.a. The family element of CTC is not reduced unless income is more than £50,000 p.a. when it is reduced by £1 for every £15 of additional income.

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