Child Tax Credit - United Kingdom

United Kingdom

In the United Kingdom, a family with children and an income below about £42,000 can claim child tax credit on top of child benefit. The tax credit is "non-wastable" - i.e. it is paid whether or not the family has a net tax liability - and is paid in or out of work. Higher rates are paid for disabled children. It is integrated with the working tax credit, which also provides support for childcare costs.

In the tax year 2009/10, for those with a household income below £58,000 this was worth £545 a year as a family element (£1,090 if they have a baby under 1 year old). For those with low incomes, there is an additional £2,235 per child per year, and this is tapered away at a rate of 39% as earnings increase above £16,040 per year.

In April 2011, the household income amount went down to £41,000 to qualify for Child Tax Credits. The extra £545 for a baby under 1 year old was abolished.

From 6 April 2012, family element will be withdrawn at the same rate and income as other elements of child tax credit.

All taxable income is tested for the Credit, so a couple who both work and have children, will have both salaries taken into account.