Child Tax Credit (“CTC”) Print

CTC is a tax-free benefit which is administered by H M Revenue & Customs. It is payable to the claimant who is responsible for a child until 1 September following the child’s 16th birthday. CTC payments may continue beyond this age, for persons under 20 who are in full time non-advanced education, which includes “A” levels, NVQ level 3, or the Scottish Highers. Subject to certain conditions CTC may also be claimed in respect of children aged 16 or 17 who have left full-time education and are not in full time work of 24 hours or more per week.

The amount of CTC payable in 2020/21 is split into two components, the family element and the child element. The maximum amount payable for each element is £545, and

£2,830 respectively. The child element is payable for each qualifying child. The child element is increased to £6,245 where the child is disabled, and £7,630 where the child is severely disabled.

For 2021/22 the family element remains at £545, and the child element is increased to

£2,845. The child element is increased to £6,280 where the child is disabled, and £7,670 where the child is severely disabled.

The child element of tax credits, and universal credit are no longer awarded for third and subsequent children born after 6 April 2017, and for families claiming Universal Credit for the first time after April 2017. Children with disabilities and severe disabilities will receive the disabled or severely disabled element in either tax credit, or universal credit. Further protections will apply in respect of multiple births, and other exceptional circumstances.

For 2021/22 the CTC is reduced by 41p for each £1 the relevant income exceeds

£16,480. (£16,385 for 2020/21) The reduction is firstly applied against the child element, and then against the family element.

The above details apply in cases where only CTC is claimed. Where Working Tax Credits (“WTC”) and CTC are claimed the reduction threshold applies on income in excess of £6,565 for 2021/22 (£6,530 for 2020/21), and the reduction is first applied against the WTC.

Relevant income is the income of the claimant, or in the case of couples, whether married or unmarried living together as partners, the gross income of the couple. For these purposes a couple includes same sex couples, both within a Civil Partnership or otherwise.

CTC has been replaced by Universal Credit for most new claimants unless they are in receipt of the severely disabled element. More information on CTC and Universal credit can be found the HMRC website.

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