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Coronavirus - Working Tax Credit Increase to Boost Family Income

on Wednesday, 08 April 2020.

The government has announced an increase in Working Tax Credit in response to the coronavirus pandemic, which will boost some families' income by as much as £20 a week. This first took effect from 6 April 2020.

This is the first time that the benefit has risen in four years since benefits were frozen by Conservative chancellor George Osborne in 2016.

What Is Working Tax Credit?

Working Tax Credit is money that is provided by the government to those who are working on a low income.

How Much Has it Increased?

As of 6 April, some claimants will see their income rise increase by 1.7% to bring it in line with inflation. The basic element of Working Tax Credit has been increased by £1,045 to £3,040 for a year from 6 April 2020 until 5 April 2021. It should be noted that the exact amount each claimant will benefit from is calculated in accordance with their level of household income.

In addition, the government is uprating Child Benefit, other tax credits rates and thresholds, and Guardian’s Allowance by 1.7% with effect from 6 April 2020.

The government had already confirmed that the benefits freeze would end in 2020, but has gone further than originally planned in response to coronavirus. The rise will undoubtedly be a welcome change as the coronavirus lockdown continues to affect many. Although the changes take effect as of 6 April, they will come into effect at different times depending on each individual's circumstances.

How Can We Help?

If you are already entitled to tax credits, you don't need to take any further action. HMRC's tax credits calculator can help you to get an estimate of how much you could get in tax credits in a four-week period.


If you are an individual or a business, and would like further legal advice for yourself or your employees regarding working tax credits, please contact Emma Bradley in our Corporate Tax team on 07747 462 131, or complete the form below.

 

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