Working Tax Credit

Unlike Working Tax Credits, there are no limits to the hours you can work on Universal Credit.

Are you already claiming Working Tax Credit? Then how and when you move to Universal Credit depends on if you have to make a new claim because of a change in circumstances.

This might mean you’ll have to make a new claim for Universal Credit. HMRC will tell you what you need to do.

Call the Tax Credit Helpline on 0345 300 3900 to let them know about any changes to your circumstances.

Are you getting Working Tax Credit, work at least 16 hours a week and pay for childcare? Then you might be able to claim the ‘childcare element’ of Working Tax Credit. This will help with up to 70% of your childcare costs.

• if you’re in a couple, you need to be working at least 16 hours each to qualify
• you can be eligible if you’re employed or self-employed.

In most cases, you must use registered or approved childcare. This can include childminders, playgroups and nurseries.

Support for childcare costs is more generous on Universal Credit than for Working Tax Credit.as you might be able to claim back up to 85% of eligible childcare costs. In 2022/23 this is up to a maximum of £646.35 for one child, or £1,108.04 for two. These rates are due to increase to £951 for one child and £1,630 for two children from 29 June 2023.

This is compared with the 70% you could claim through the childcare costs element of Working Tax Credit. If you’re getting Working Tax Credit, you can use our Benefits Calculator to see if you would be better off moving to Universal Credit.  

It is always best to get specialist benefits advice before making a claim for Universal Credit because you can’t move back to Tax Credits once you have submitted the claim.

With the childcare element of Working Tax Credit, you can get help with up to 70% of your childcare costs. This is up to certain maximum weekly limits.

If you pay more than this for childcare, you’ll still only get the maximum amount shown above.

If you qualify for the childcare element, you won’t necessarily get the full amounts.

How much you get will depend on:

• your income
• the hours you work
• your childcare costs.

If you’re already claiming tax credits, call the Tax Credit Helpline to update your claim.

From April 2023, if you’re getting tax credits only, that’s 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.  

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.

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.

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.

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 Service 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 

You must tell HMRC within 30 days if you have a change of circumstances that could affect your Working 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 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.

You need to renew your tax credits claim by 31 July every year if you want to keep getting them.

HMRC will write to you to telling you what you need to do to renew your tax credits.

If your circumstances change at any time during the year, let HMRC know onlineOpens in a new window, by using the HMRC appOpens in a new window or by calling 0345 300 3900. You might need to update HMRC if for example, if your income changes, your child leaves home or you move house.

Changes in your circumstances can affect the amount of money you get, or mean you have to make a new claim for Universal Credit.

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 a 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 overpayments at later.

If your income falls by £2,500 or more, you might be entitled to more tax credits, or be asked to claim Universal Credit. Tell HMRC as soon as possible about your change of circumstances.

If you’re asked to repay tax credits and will struggle to pay, speak to HMRC as soon as you can.

You need to renew your tax credits claim by 31 July every year if you want to keep getting them.