Working Tax Credit and Child Tax Credit: Your Complete 2026 Guide
Disclaimer: This is an independent informational portal. We are not affiliated with, endorsed by, or connected to any UK government body, council, or the Home Office. All information is provided for guidance purposes only. Always check the official GOV.UK website for the most up-to-date and legally binding information.
Introduction
If you are on a low income and struggling to make ends meet, Working Tax Credit and Child Tax Credit may be able to help. These legacy benefits, administered by HMRC, provide essential financial support to millions of UK households — but the system is changing rapidly.
The most important thing to understand in 2026 is that tax credits are being replaced by Universal Credit. New claims for tax credits are no longer accepted in most circumstances. However, if you already receive tax credits, your payments will continue until HMRC invites you to switch.
This guide will explain how both credits work, who can still claim them, and what the managed migration process means for you. We will also cover the key dates and thresholds you need to know for the 2026/27 tax year.
What Are Working Tax Credit and Child Tax Credit?
Tax credits were introduced in 2003 as a way of topping up the incomes of low-paid workers and families with children. There are two separate credits, but you make one claim and HMRC works out what you are entitled to.
Working Tax Credit
Working Tax Credit is for people who work but earn a low income. You do not need to have children to qualify. The amount you receive depends on your income, how many hours you work each week, and whether you have a disability or children.
To qualify, you generally need to work at least 16 hours a week if you are single and have children, or 30 hours a week if you are over 25 and do not have children.
Child Tax Credit
Child Tax Credit is for people who are responsible for at least one child. You do not need to be working to receive it. It is paid on top of Child Benefit and helps with the costs of raising a family.
The amount depends on your household income and the number of children you have. You can receive Child Tax Credit even if you are not working at all.
Can You Still Claim Tax Credits in 2026?
This is the crucial question. The short answer is: most people can no longer make a new claim for tax credits.
Since 27 January 2021, the Severe Disability Premium (SDP) Gateway closed, meaning even claimants with SDP can no longer make new tax credit claims. The only exceptions are very specific circumstances, such as certain frontier workers who live in one country and work in another.
If you are not already receiving tax credits, you will almost certainly need to claim Universal Credit instead. Universal Credit has replaced six legacy benefits, including both Working Tax Credit and Child Tax Credit.
Existing Claimants
If you already receive tax credits, your payments will continue for now. HMRC is gradually moving claimants over to Universal Credit through a process called managed migration. You will receive a letter called a migration notice when it is your turn to switch.
Important: Do not move to Universal Credit before you receive your migration notice unless you are certain it is the right move for you. Once you move, you cannot go back to tax credits. The two systems work differently, and some people are better off on tax credits while others are better off on Universal Credit.
For a full breakdown of how Universal Credit compares to tax credits, read our guide on the managed migration process.
How Much Are Working Tax Credit and Child Tax Credit Worth?
From 6 April 2026, working-age benefits and tax credits increased by 3.8% for the 2026/27 tax year. This applies to both Working Tax Credit and Child Tax Credit.
Working Tax Credit Elements (2025/26 rates for reference)
The exact amount you receive depends on your circumstances. The main elements include:
Basic element: for single people or couples
Couple and lone parent element: an extra amount if you are part of a couple or a lone parent
30 hour element: if you work at least 30 hours a week
Disabled worker element: if you have a disability that affects your ability to work
Severe disability element: if you receive certain disability benefits
Childcare element: helps with up to 70% of eligible childcare costs
Child Tax Credit Elements
Child Tax Credit includes:
A family element for households with children
A child element for each child you are responsible for
A disabled child element for children with disabilities
A severely disabled child element for children with severe disabilities
The amount you receive is reduced based on your household income. The income threshold for tax credits has remained relatively low, meaning many working families qualify for some support even if they do not think of themselves as “low income.”
Savings and Tax Credits: What You Need to Know
Your savings can affect your tax credit entitlement. The rules are straightforward but often misunderstood.
Savings Thresholds
Under £6,000: Your savings do not affect your tax credits at all
£6,000 to £16,000: HMRC adds £1 to your weekly income for every £250 (or part of £250) you have above £6,000
Over £16,000: You cannot claim tax credits
This limit applies to your household’s combined savings if you make a joint claim. It covers bank accounts, investments, shares, Premium Bonds, and ISAs. Your main home and personal possessions do not count.
Important warning: If your savings go over £16,000, you must tell HMRC within one month. Failure to do so could result in an overpayment that you will have to repay.
Step-by-Step: What to Do If You Already Receive Tax Credits
If you are an existing tax credit claimant, here is what you need to do:
Step 1: Watch for Your Renewal Pack
HMRC sends renewal packs between April and June each year. You must renew by 31 July to keep your payments. If you do not renew, your payments will stop.
Step 2: Report Any Changes in Circumstances
You must tell HMRC about changes that could affect your claim, including:
Changes in income
Changes in work hours
Changes in childcare costs
Changes in your household (someone moving in or out)
Changes in savings
Step 3: Watch for Your Migration Notice
When HMRC is ready to move you to Universal Credit, you will receive a migration notice. This gives you a deadline to make your Universal Credit claim.
Critical: Do not ignore this letter. If you do not claim Universal Credit by the deadline, your benefits will stop.
Step 4: Get Advice Before Switching
Before you respond to your migration notice, speak to Citizens Advice or another welfare rights organisation. Moving to Universal Credit is generally one-way — you cannot return to tax credits once you switch. Some claimants are better off on Universal Credit, but others are worse off.
Quick Reference Checklist
☐ Already on tax credits? Renew by 31 July each year
☐ New to benefits? You almost certainly need to claim Universal Credit, not tax credits
☐ Savings over £16,000? You cannot claim tax credits
☐ Received a migration notice? Do not ignore it — seek advice before claiming Universal Credit
☐ Income changes? Report them to HMRC immediately to avoid overpayments
☐ Need help? Call the tax credits helpline on 0345 300 3900
Frequently Asked Questions
Can I make a new claim for Working Tax Credit or Child Tax Credit?
No, in almost all cases. New tax credit claims closed on 27 January 2021 for Severe Disability Premium claimants, and the system is being replaced by Universal Credit. The only exceptions are certain frontier workers. If you need financial support, you should claim Universal Credit instead.
Will I lose money if I move to Universal Credit?
Not necessarily. Some people receive more on Universal Credit, while others receive less. The government has put transitional protection in place for managed migration, which means if you are moved over by HMRC and your Universal Credit entitlement is lower than your tax credits, you may receive a top-up payment to make up the difference.
How much savings can I have on tax credits?
You can have up to £16,000 in savings and still qualify for tax credits. If you have between £6,000 and £16,000, your payments are reduced. Under £6,000, your savings do not affect your claim.
What happens if I don’t renew my tax credits?
If you do not renew by 31 July, your payments will stop. You may be able to restart them, but this can cause delays and financial stress. Always renew on time, even if your circumstances have not changed.
Does Working Tax Credit affect the benefit cap?
Yes, but in a positive way. If you or your partner receive Working Tax Credit — even if the amount is £0 — you are not affected by the benefit cap. This can make a significant difference to your overall household income.
Can I claim tax credits if I am self-employed?
Yes, self-employed people can claim Working Tax Credit if their income is low enough. You will need to provide details of your self-employment income and may need to show that your business is commercially viable. The Minimum Income Floor rules that apply to Universal Credit do not apply to tax credits.
Conclusion
Working Tax Credit and Child Tax Credit have helped millions of UK families since 2003, but the system is now in its final chapter. New claims are closed, and existing claimants are being gradually moved onto Universal Credit.
If you are already receiving tax credits, the key things to remember are:
Renew on time by 31 July
Report changes in circumstances promptly
Watch for your migration notice and seek advice before switching
Do not ignore correspondence from HMRC
If you are not yet on tax credits, your route to support is through Universal Credit. Use the GOV.UK benefits calculator to check what you might be entitled to.
For more guides on UK benefits, Universal Credit, and navigating the cost-of-living crisis, explore our website. We are here to help you understand your entitlements with confidence.