November 01, 2022
Unlock a world of financial support in the UK! Delve into the intricate landscape of tax credits and benefits designed to ease the burden on individuals. In this comprehensive guide, we'll unravel the diverse array of programs available to help you make the most of your hard-earned money and improve your financial well-being.
The Tax – levying authorities make sure that the system does not become a burden on the tax payers, exactly as a honey bee sucks nectar of the flower, but does not harm it. The HMRC in UK has introduced certain tax credits and benefits for the tax payers for this purpose.
There are three types of tax credits available.
Working Tax Credit:
Working tax credit is money provided to boost the income of working people who are on a low income.
You can have this Credit if you already get Child Tax Credit. But, in case if you cannot apply for Working Tax Credit, you can apply for Universal Credit instead. You must work a certain number of hours a week to qualify. Under this credit, you get a basic amount (up to £2,070 a year) and extra (known as ‘elements’) on top of this. Money is paid directly into your bank account, every week or 4 weeks.
Child Tax Credit:
You can get child tax credits for your first or second child at £2,935 a year for each child. You can have this Credit if you already get Working Tax Credit. The amount you could get depends on when your children were born and whether it is a normal child or disabled. Money is paid directly into your bank account, every week or 4 weeks.
Universal Credit is a payment to help with your living costs. It’s paid monthly - or twice a month. It replaces six different credits and benefits.
You may be able to get Universal Credit if you’re on a low income or need help with your living costs – whether out of work or unable to work or working.
To claim this credit, you must live in the UK, be aged 18 or more but less than State Pension age and have income £16,000 or less annually.
The amount under this credit is £290.00 for first child and £244.58 per child for the second and any other eligible child.
The amount also affected by the fact if the child is disabled or you have disability or health issues. This Credit is paid once a month into your bank account.
The benefits are made available to the taxpayers by way of reliefs and allowances.
Tax Relief is enjoyed by paying less tax for money you’ve spent on specific things or get the tax back or repaid in some other way.
You get some types of tax relief automatically; for others you will need to apply.
You can enjoy tax relief for pension contributions, charity donations, maintenance payments and time spent working on a ship outside the UK.
Donations to charity from individuals are tax free. You can get tax relief if you donate through Gift Aid or via Payroll Giving to a registered Charities and community amateur sports clubs (CASCs).
You can also get relief for the Maintenance payments that you make for your ex-spouse or civil partner or children under 21. Maintenance Relief is limited to 10% of the maintenance you pay to your ex-spouse or civil partner, up to a maximum of £364 a year.
Various allowances enjoyed by tax payers are as below: