In the United Kingdom, tax credits are government payments designed to provide extra financial support to parents, people on low incomes, and people with disabilities
. There are two types of tax credits: Working Tax Credit (WTC) and Child Tax Credit
. These credits are calculated as an annual amount and paid in weekly or monthly instalments during the tax year
. They are dealt with by HM Revenue and Customs (HMRC) rather than the Department for Work and Pensions (DWP), which is responsible for most other benefits
. Working Tax Credit (WTC) is paid to people who work and have a low income, regardless of whether they are an employee or self-employed
. The amount of WTC depends on factors such as the total amount of income, the number of hours worked, and the amount paid for childcare
. Some self-employed individuals may not be eligible for WTC if their work does not aim to make a profit, is not commercial, regular, or organized
. Child Tax Credit is available to parents or guardians responsible for at least one child under the age of 16, or one child under the age of 20 if the child is in approved education or training
. The amount of Child Tax Credit depends on the age of the children and the amount of income
. Tax credits are different from tax credits linked to a person's tax bill, as they are used to top-up wages
. They are also different from Universal Credit, a benefit payment from the government that supports people who need extra money
