Based on the current economy, it is safe to say that most workers in the UK are eligible to claim tax credits; an extra form of financial assistance that is available to low income workers who meet certain criteria.
However, before you begin using software like the HMRC tax credits calculator, there are certain things you should know about the credits themselves.
Do I Qualify for Either Form of Tax Credit?
In order to be eligible for the tax credits, you need to work a certain amount of hours based on age and whether or not you are disabled. Basically, the number of hours changes with age so you will need to be quite precise on this. For instance, a 16 year old must work a minimum of 16 hours per week whereas someone who is 25 or over must work at least 30 hours per week.
Of course, the amount of money you make is also factored into eligibility, but if you are amongst a good portion of the population who works the required number of hours, you will most likely get the working tax credit.
If you have a child living with you, then there is a chance you can claim the child tax credit if certain requirements are met. If the child who lives with us is under the age of 16, the cut-off date being 31 August, you can claim the credit. Sometimes children up to 20 years of age can be claimed if they are in an approved educational program.
How to Calculate Tax Credits
Using a HMRC tax credits calculator isn’t all that difficult if you have all your information lined up to enter in as the questions arise. It is a simple process of answering questions and going on to the next screen.
There will be two radio/options buttons giving you a choice between yes and no when you begin to calculate your eligibility. Simply click the option which best answers the question and move on. If you are asked how many hours per week you work, this will require a number to be typed in. If you have all the required forms, such as your P60, on hand, the entire process will only take about ten to fifteen minutes to complete.
You can easily find a tax credit calculator online and after ten or fifteen minutes you will have a good idea of what the lump sum will be. Keep in mind that you will receive payments throughout the year, but the calculator gives a lump sum estimation upon which those payments are based.