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The
children’s tax credit replaces the married couple’s allowance and the
additional personal allowances and is given as a reduction of the claimant’s
tax liability. The
children’s tax credit commenced 6 April 2001.
Who can claim
the children’s tax credit? It
is available to married or unmarried couples and to single parents.
To claim you must have at least one child who is:
· your own child, a stepchild, adopted child or a child you look
after at your own expense · under 16 at the start of the tax year and · living with you for at least part of the tax year. What happens if
the child reaches 16 during the tax year? You
are still entitled to the children’s tax credit for the whole year as
long as the child is living with you during the period before his or
her 16th birthday.
Which partner
should claim the children’s tax credit? Either
partner can have the whole of the tax credit, or they can decide to
share the credit equally. If either or both partners pay higher rate
tax then the partner with the largest income must claim the tax credit.
How much is it
worth? · For 2001/2002 the maximum credit amounts to £442. · The credit is reduced by £1 for every £15 of higher rate tax if the claimant’s income exceeds £32,785 (based on 2000/01 tax bands), so you are unlikely to receive any credit if your income is above around £41,000.
How do I claim
it? Employees: The
tax credit will be given through the PAYE coding notice for 2001/2002.
If it has not been given automatically, then a claim form should be
submitted.
Self-employed: The
tax credit will be claimed through the 2002 Tax Return and will reduce
the payments to be made against the 2001/2002 tax liability. |
