Taxes
Did you know you can claim working tax credits, even if you’re self employed? Being self employed can be stressful at the best of times. But it’s even more so when you’ve just started out and your income is low. Claiming working tax credits can help top up your income during those initial lean months.
What are working tax credits?
Working tax credits allow you to top up your earnings if you’re working but have a low income.
They consist of two parts:
- A basic amount
- Elements, or extras
Depending on your circumstances, you can get just the basic amount or the basic plus one or more elements.
We’ll look at what exactly you can get in more detail below.
Can I claim working tax credits?
You can claim working tax credits both if you’re employed or self employed. In either case, you’ll need to satisfy a number of criteria in order to qualify.
If you don’t have children, you must:
- Be 25 years old or over
- Work more than 30 hours a week
- Earn less than £13,253 (If you’re claiming as a couple, the limit is £18, 203 jointly)
If you have children or suffer from a disability, you may be eligible for working tax credits even if you earn more than this amount. However, you must:
- Be at least 16 years old
- Work at least 16 hours a week
Understanding elements
Depending on your circumstances, you may also be eligible for one or more elements. These are added to your total working tax credit.
However, HMRC calculates the total amount based on your income. The more you earn, the less working tax credits you’ll get.
You can estimate approximately what you might get by using the tax credits calculator on the GOV.UK website. Alternatively, you can use the benefits calculator, which includes tax credits, on the Entitled to website. Note, the HMRC calculator will show potential entitlement from the day you use the calculator to the end of the tax year. The Entitled to checker shows potential entitlement for the whole current tax year (6 April to 5 April).
