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Claiming Tax Credits and Benefits – Part 1 : Child Tax Credits

May 28, 2014

Posted by Simon Misiewicz on 28th May 2014

Are you worried about money as a property investor?

Would you like to claim tax credits and benefits to boost your income?

The Diagnosis

Tax and money issues need to be diagnosed in order to be understood and for a remedy to be implemented.

There may come a time when one member of the household decides it is best that they become a full time investor. There are a few factors that need to be worked out before that can happen. One of the major considerations is how much money can you survive on until property generates enough income to sustain the family financial needs.

We have written several articles to enable you to make more money as a property investor:

 Part 1: Child tax credits

Part 2: Working tax credits

Part 3: Tax credits examples

Part 4: Maternity pay and child benefit

Part 1: Child tax credits

If you are entitled to Child Tax Credit only, you will get the full amount of that tax credit until your annual income reaches £15,860. As a guide you may get an award of Child Tax Credit if you have:

  • 1 child and a household income of up to about £26,000
  • 2 children and a household income of up to about £32,600 (1) (3)

If the qualifying young person is aged 16 or 17, and has left full-time, non-advanced education or approved training, you may be able to get Child Tax Credit for them for up to 20 weeks after they left. To qualify for these extra weeks, they need to have registered with any of the following.

  • A careers service, Connexions, local authority support service or similar organisation (in Northern Ireland, the Department for Employment and Learning or an Education and Library Board).
  • The Ministry of Defence, if they’re waiting to join the armed forces.
  • Any corresponding body in another member state.

Examples of non-advanced education are (3):

  • GCSEs, A levels and other general academic qualifications of a similar standard, for example, iGCSEs, Pre-U and The International Baccalaureate
  • NVQ level 1, 2 or 3
  • BTEC National Diploma, National Certificate and First Diploma
  • Traineeships (England)
  • Standard Grade (Scotland)
  • SVQ level 1, 2 or 3
  • Scottish Group Awards

You could get a basic amount and extra (known as ‘elements’) on top of this. How much you get depends on things like your income and circumstances (eg if your child is disabled).

The basic amount is up to £545 a year (4) in addition to the below amounts.

Elements Yearly amount
For each child Up to £2,750
For each disabled child Up to £3,100
For each severely disabled child As above + £1,255

 

Child Tax Credit will be paid directly to the main carer for all the children in the family. If you are part of a couple, you will need to declare which of you is the main carer for the children. If you are a single parent, this will be paid direct to you. You can choose whether to get payments weekly or every 4 weeks (1).

You can calculate the amount of tax credits that you can claim by going to the below URL:

https://www.gov.uk/tax-credits-calculator 

If you are looking for an accountant or thinking of changing your current accountant because they do not understand property investing and tax implications then please Click Here To Book an “Initial Free Consultation”.

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References:

  1. A Guide To Child Tax Credit And Working Tax Credits
  2. Working Tax Credit – Help With The Costs Of Childcare
  3. Child Tax Credit and Working Tax Credit – An Introduction
  4. Child Tax Credit – An Overview

 

 



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Telephone: 0115 939 4606
Email: simon@optimiseaccountants.co.uk