Child Tax Credit is a benefit that helps with the costs of raising a child if you’re on a low income. It’s being replaced by Universal Credit, so most people who need help with these costs now have to make a claim for Universal Credit instead.
Universal Credit and Child Tax Credit
Child Tax Credit is one of six benefits being replaced by Universal Credit.
Unless you’re currently getting Working Tax Credit, you can no longer make a new claim for Child Tax Credit and must apply for the child element of Universal Credit instead.
Find out how much you might get in Child Tax Credit if you’re still able to claim it, using the Tax Credits Calculator on GOV.UKOpens in a new window
Universal Credit and childcare costs
If you qualify for Universal Credit and have childcare costs, you might be able to claim back up to 85% of eligible childcare costs. For the 2024/25 tax year, this is up to a maximum of £1,014.63 for one child, or £1,739.37 for two or more.
This is compared with the 70% you could claim through the childcare costs element of Working Tax Credit.
To get the childcare costs element of Universal Credit, you must:
be in paid work, or
have an offer of paid work that’s due to start before the end of your next Universal Credit monthly assessment period.
If you’re in a couple, your partner must also be in paid work. This is unless they can’t provide childcare because of a limited capability for work, or they’re caring for a severely disabled person.
You can claim the child element of Universal Credit for all qualifying children born before 6 April 2017.
If your children were born on or after 6 April 2017, you’ll only be able to claim for the first two. This is unless you had a multiple birth – or there are other limited exceptions.
If you’re getting Child Tax Credit and think you might be better off on Universal Credit you can choose to switch. However, it’s really important to get specialist benefits advice before you do this because once you’ve made a claim for Universal Credit you can’t go back to tax credits.
Start by using our Benefits Calculator or find a specialist benefits adviser on Advicelocal Opens in a new window
Find out more in our guide Universal Credit explained
Moving to Universal Credit because you received a Migration Notice
If you’re getting tax credits only (Working Tax Credit, Child Tax Credit or both), DWP may invite you to claim Universal Credit as part of its ‘Move to UC’ programme.
You will need to claim Universal Credit even if you have recently renewed your tax credits claim.
Initially, you shouldn’t be worse off on Universal Credit than you were on your old benefits. If the amount you’re entitled to is less on Universal Credit, your payment will be topped up under Transitional Protection.
Use our Benefits calculator
If you’re living on a low income or have had an income shock, use our Benefits calculator to quickly find out what you could be entitled to.
You won’t be moved onto Universal Credit automatically, you will need to apply. Once your application has been submitted, your tax credits will stop and you won’t be able to go back on to them, so make sure you understand what's involved before you make a claim.
How you'll be told you're moving on to Universal Credit
You’ll receive a Migration Notice letter from DWP asking you to claim Universal Credit within three months from the date the letter was sent out.
You’ll need to make the claim online (but there is lots of support available if you will struggle to do this).
Our downloadable printed guide Getting Ready for Universal Credit can help you prepare.
If you have £16,000 or more in savings
The amount you can have in savings is different for Universal Credit than it is for tax credits. Usually you don’t qualify to get Universal Credit if you have £16,000 or more in savings or capital.
However, if you move over to Universal Credit from tax credits because you received a Migration Notice, your savings won't affect your eligibility for Universal Credit for 12 assessment periods (about 12 months).
After then, if you still have £16,000 or more in savings you will no longer qualify for Universal Credit. If you still have between £6,000 and £16,000, your Universal Credit payments will be reduced by £4.35 for every £250 of savings you have.
How to find extra support
If you’re asked to move to Universal Credit and have questions, call the helpline number given in your Migration Notice.
If you live in England, Wales or Scotland you can also contact the Citizens Advice Help to Claim ServiceOpens in a new window for free, confidential and impartial advice.
Ways you can contact the Citizens Advice Help to Claim support service:
England and Wales
More details at Citizens AdviceOpens in a new window
Or, in England, call 0800 144 8444. In Wales, call 0800 024 1220
Scotland
Visit Citizens Advice ScotlandOpens in a new window or call 0800 023 2581
Northern Ireland
Universal Credit works differently. Find out more at nidirectOpens in a new window
Moving to Universal Credit if you have a change in circumstances
You must tell HMRC within 30 days if you have a change of circumstances that could affect your Child Tax Credit. For example:
losing or getting a job
having a baby
a partner moving in or out.
This might mean you’ll have to make a new claim for Universal Credit. HMRC will tell you what you need to do.
If you have £16,000 or more in savings
If you have a change of circumstances that triggers a claim for Universal Credit and you have £16,000 or more in savings, it’s important to get specialist benefits advice before you make a claim for Universal Credit as your savings can affect whether you qualify for Universal Credit.
Call the Tax Credit Helpline on 0345 300 3900 to let them know about any changes to your circumstances.
Find out more in our guide How will moving to Universal Credit affect me?
At Advicelocal you can find a benefits specialist near youOpens in a new window
Keeping your tax credits up to date
You need to renew your tax credits claim every year if you want to keep getting them.
HMRC will write to you each May or June telling you what you need to do to renew your tax credits.
The deadline to respond is usually 31 July each year.
You can manage your tax credit claim using the HMRC appOpens in a new window You can use it to renew your tax credits, report a change of circumstances and find out when and how much you’ll be paid. It means you can avoid the phone lines which get very busy between May and August each year around the tax credit renewal deadline.
If you don’t get your renewal pack, you’ll need to use the app or contact the Tax Credit helpline on 0345 300 3900. Do this as soon as you can to make sure you can meet the deadline.
If you miss the deadline
- You’ll be sent a ‘statement of account’, telling you your tax credits will stop. Any provisional payments you get will be classed as an overpayment and will need to be repaid.
- Contact HMRC within 30 days of the date on your statement of account. A renewal can then be processed to reinstate your claim back to 6 April.
- If you contact HMRC later than 30 days after you get your statement of account, you’ll only be able to have tax credits reinstated where you can show you have ‘good cause’ for renewing late. You’ll need to contact them by 31 January. Your claim will then be treated as if it was made on 6 April.
- If your claim isn’t reinstated, or you don’t contact HMRC after getting your statement of account, your tax credits payments will stop. And you’ll have to pay back the tax credits you’ve received since 6 April 2024.
If HMRC stops your payments
You might be able to apply for Universal Credit if you‘re under State Pension age (or your partner is). Or you might be able to apply for Pension Credit instead if you (and your partner) are over State Pension age.
Find out more in our guide Pension Credit
Renewing your claim for tax credits
State Pension calculator
To work out your State Pension age, use the State Pension calculator at GOV.UK (Opens in a new window)
When you renew your claim, make sure you use the official HMRC phone number, app, website and correspondence. This is because around the deadline time there is often an increase in scammers who often target people likely to be reapplying.
You can manage and renew your tax credits at GOV.UK (Opens in a new window)
You can get in touch with HMRC to renew your claim or report a change in circumstances online, via their appOpens in a new window or by calling 0345 300 3900.
There’s also a dedicated team to support the most vulnerable customers who can’t go online. People who HMRC know need this support will be contacted by the support team.
Find out more about getting help from HMRC if you need extra supportOpens in a new window
Always let HMRC know if your circumstances change at any time during the year. For example, if your income changes, your child leaves home or you move house.
This is because you might have to claim Universal Credit instead.
Find out more about changes that affect your tax credits on GOV.UKOpens in a new window
Tax Credits and income changes
If your income goes up by £2,500 or more and you delay telling HMRC or wait until the next time your claim is due to be re-assessed, you might find you’ve been overpaid tax credits.
You’ll be asked to pay this extra money back. This will be either by reducing your future tax credits, or by direct payments if your tax credits have stopped.
To avoid this bill, it’s even more important to tell HMRC within 30 days of when you get the extra money.
It’ll be easier for your tax credits to be adjusted, and decrease the chance you’ll be chased for over-payments later.
It also works the other way. If your income falls by £2,500 or more, you might be entitled to more tax credits.
If you’re asked to repay tax credits and will struggle to pay, speak to HMRC as soon as you can.
