child tax credits in shared custody

Who Gets Child Tax Credits in Shared Custody?

13/02/2023tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

Nowadays shared custody is also known as residency in the UK. This is important to consider especially if the parents are going through a breakup. The child’s residency will decide who will get the benefits of child tax credits. To qualify for the eligibility criteria, the first thing to consider is the ability to be the most responsible for handling the child’s needs. When somebody enquires about child tax credits in shared custody, this becomes a highly complex question. This is because of the fact that only one of the guardians will get the amount of child credits in the case of shared custody. This happens several times that both partners might think of themselves as the suitable ones to get the child tax credits and get benefits from it, however, the truth is that for one child only one will be entitled to avail of the benefits.

 

Our team of professional members loves to hear out your problems and find out the possible and suitable solutions quickly for small businesses’ accounting problems. Call us or email us today.

 

Who Gets Child Tax Credits in Shared Custody?

Before you check the eligibility of getting the amount of child tax credits, you will have to take responsibility for that one child. This further explained that the child is under your supervision legally and you are the one who will look after the daily needs of the child and handle the cost of bringing that child up until the child reaches the age of 16. According to the government instructions, there can not be any split in the amount received through the child tax credits.

This tells us that one of the partners can have the amount of child tax credits for one child and the same child details will not work for claiming again on behalf of another partner. In the case where both partners are taking care of the children and have shared custody, it is complicated to figure out which one partner should be getting the number of benefits. Only the private agreement between the partners can actually resolve this issue and reach a peaceful mutual decision. This will actually help to have the factor of flexibility and decide just what is most suitable to your unique needs and circumstances.

 

What are Child Tax Credits in the UK?

Basically, child tax credits are defined as a tax-free amount in the UK that is given to the parents for the cost they spend on bringing up a child. Now child tax credits are also known as universal credit in the UK. Now according to the new UK rules, the ability to claim the benefits is limited. It is most often possible when one of the parents is going through an expensive or severe disability and can not afford to handle the responsibility of bearing the cost of bringing up a child on his own. As per the set of rules, the legislation says that when you are bringing up a child who is of age 16 or under the age of 16, you are in a good position to claim the benefits unless the child turns sixteen.

In some cases when your child has crossed the age limit of age 16 but is still going through educational training, you are again in a better position to benefit from the child tax credits. People between the age of 16-18 who are unable to handle the living cost due to being unemployed or surviving on a low income can also take benefits of the credits. If you and your partner are getting the child tax credits for more than one child,  the amount you will receive is affected by this fact. Moreover, living with a partner as a spouse or in a civil partnership will require you to provide the details of your partner’s income before you complete the process of claiming child tax credits.

 

What are the Requirements to Support Your Claim?

Since the process can easily be completed online, however, there will be a requirement to submit certain documents to complete the process. The possible requirements of documentation may ask for the following:

  1. How amount you are spending on the cost of child care?
  2. The rent amount and relevant information about the residence you are living in.
  3. The email address
  4. The account details of your bank
  5. You will have to share all the information regarding rental properties, shares, investments, and savings.
  6. Evidence of your income in form of your wage or salary slip.
  7. You will be required to provide proof of your identity like a credit card, driving licence, or through your passport.

 

How to Claim If You Qualify for the Eligibility Criteria?

The first advisable step to do when you are trying to claim after meeting the eligibility criteria is to get in touch with HMRC. You can simply do it over a phone call. They will consider your circumstances if you are entitled to qualify. After the separation, this must be privately decided between the partners who are going to receive the child tax credits and who is responsible for the child.

If you are already getting the benefits, there is no need to make a new claim after the separation. You better come on mutual terms and decide who is going to receive the amount. However, you will have to inform the office of the credit about the change of circumstances. This can easily be done online or over a phone call.

 

The Bottom Line

Now that you have gathered a fair amount of information about the child tax credits in shared custody, we can bring the discussion towards wrapping up. The amount of child tax credits are indeed beneficial for being the cost of a child’s brought up in the UK. However, this becomes a little complicated in case of separation. This is because of the rule that only one of the partners can make the claim for child credits for one child. In case of being separated, there must be a mutual decision made. This will help to be clear about who will take care of the child and who will receive the child tax credits in the future.

 

If you seek professional help to learn more about child tax credits in shared custody, why wander somewhere else when you have our young and clever team of professionals at CruseBurke?

 

Disclaimer: The general information provided in this blog about child tax credits in shared custody includes text and graphics. It does not intend to disregard any of the professional advice in the future as well.


Related post

when is tax credit ending
When is Tax Credit Ending?

27/08/2024tax , Taxation

When is the tax credit ending? If you’re one of the millions of people in the UK receiving tax credits, it’s essential to be aware of significant changes on the horizon. The UK government has been gradually phasing out tax credits and replacing them with Universal Credit, a new benefits system designed to simplify and streamline support for working-age individuals and families. As the transition continues, it’s crucial to understand when and how tax credits will come to an end, and who will be affected. With the managed migration process underway, existing tax credit claimants will be transferred to UC in stages. While new claimants will only be able to apply for UC. In this discussion, we’ll break down the key dates, deadlines, and tips to help you navigate this transition smoothly. If you’re a working parent, a low-income earner, or simply seeking to understand the changes, this information will help you. Get in touch with our young, clever, and tech-driven professionals if you want to choose the best guide on when is tax credit ending. What are the Reasons for Replacing Tax Credits with UC in the UK? The UK government decided to replace tax credits with Universal Credit to simplify the benefits system and make it more efficient. The old system was complex, with multiple benefits and tax credits available, each with its own eligibility criteria and application process. This led to confusion and errors, causing some people to miss out on benefits they were entitled to. UC combines six benefits, including tax credits, into one single payment. Tackling Welfare Dependency Another reason for the change is to encourage people to work and become self-sufficient. Tax credits were criticised for creating a “benefits trap,” where individuals were better off financially not working or working fewer hours. Reducing Fraud and Error The tax credit system was vulnerable to fraud and error, with billions lost each year due to incorrect claims or overpayments. UC introduces stricter checks and real-time earnings data to minimise errors and prevent fraudulent claims. This ensures that those who genuinely need support receive it while reducing waste and saving taxpayer money. Improving Work Incentives UC also aims to improve work incentives by providing a single, unified system that supports people in and out of work. Under the old system, people faced a “cliff edge” when moving from benefits to work, losing all support at once. UC’s tapered reduction of benefits as earnings rise helps to ease this transition, making it more attractive for people to take on work and increase their hours. Aligning with Changing Work Patterns The modern workforce is increasingly flexible, with more people in temporary, part-time, or self-employed work. UC is designed to adapt to these changes. Providing support for those with fluctuating incomes or irregular work patterns. This ensures that the benefits system remains relevant and effective in today’s labour market. When is the Tax Credit Ending? The UK government first announced plans to replace tax credits with Universal Credit in 2010, as part of a broader welfare reform agenda. This marked the beginning of a gradual transition process that would unfold over several years. Phased Rollout (2013-2018) UC was introduced in 2013, with a phased rollout across the UK. New claimants in certain areas were initially directed to UC while existing tax credit claimants remained on the old system. This allowed for testing and refinement of the new system before wider implementation. Accelerated Transition (2018-2022) In 2018, the government accelerated the transition, starting to move existing tax credit claimants to UC. Final Stages (2022-2025) The final stages of the transition are currently underway, with the majority of tax credit claimants expected to be moved to UC by 2024-2025. Key Milestones October 2018: DWP begins writing to tax credit claimants to inform them of the transition January 2019: Managed migration starts, with claimants transferred to UC in stages December 2022: Government announces completion of the initial managed migration phase 2024-2025: Final tax credit claimants transferred to UC, marking the end of the tax credit system Important Deadlines New claims for tax credits closed to new applicants in 2018 Existing claimants must respond to DWP invitations to transfer to UC to avoid losing benefits Who Will Be Affected by the Tax Credit Closure in the UK? If you’re already receiving tax credits, you’ll be affected by the change. This includes: Working Tax Credit (WTC) claimants Child Tax Credit (CTC) claimants Claimants receiving both WTC and CTC You’ll be transferred to Universal Credit (UC) at some point, depending on your circumstances and the managed migration process. If you’re not currently receiving tax credits but would have been eligible, you’ll now need to apply for Universal Credit instead. This includes: New claimants who would have qualified for WTC or CTC People who experience a change in circumstances, making them eligible for benefits Groups Exempt from the Change Some groups will not be affected by the tax credit closure: Pensioners Those receiving legacy benefits, such as Income Support or Income-based Jobseeker’s Allowance Claimants with severe disabilities, who will continue to receive legacy benefits Additional Support If you’re affected by the change, you may be eligible for additional support, such as: Transitional protection, to ensure you don’t lose out financially Help with claiming UC, from the DWP or benefits experts Tips for Claimants to Prepare for Tax Credit Closure and Change in the UK Stay Informed Regularly check the official government website for updates on tax credit closure and Universal Credit (UC) Sign up for email alerts or follow social media channels for the latest news Understand Your Situation Check your eligibility for UC and understand how it will affect your benefits Use online tools or consult with benefits experts to determine your entitlements Prepare Your Finances Budget for potential changes in your benefit amounts Consider opening a new bank account specifically for UC payments Gather Required Documents Make sure you have all the necessary documents, such as:  ID and proof of address  Bank statements and …

Read more
Does Carers Allowance Affect Universal Credit
Does Carers Allowance Affect Universal Credit?

26/08/2024universal credit

Does Carers Allowance Affect Universal Credit? Caring for a loved one can be a rewarding yet challenging experience, and navigating the UK’s benefits system can add to the stress. However, understanding how these two benefits interact is crucial if you’re also receiving Universal Credit, a benefit intended to help with living costs. The relationship between Carer’s Allowance and Universal Credit can be complex. With Carer’s Allowance being treated as income for Universal Credit purposes, your payment could be reduced. This can be confusing and overwhelming, especially when trying to make ends meet while caring for someone. In this discussion, we’ll delve into the details of how Carer’s Allowance affects Universal Credit. Exploring the key considerations, potential impacts, and expert tips to help you maximise your benefits and access the support you need. By breaking down the complexities, we aim to empower carers like you to confidently navigate the UK’s benefits system. Our team of professional members loves to hear out your business problems and find out the possible and suitable solutions quickly to the reporting in the UK. Contact us now. How Does Carer’s Allowance Work in the UK? Carer’s Allowance is designed to help with the extra costs of caring for someone, such as food, transportation, and household expenses. To qualify for Carer’s Allowance, you must: Be aged 16 or over Spend at least 35 hours per week caring for someone Care for someone receiving certain benefits, such as Disability Living Allowance or Personal Independence Payment The application process typically takes around 8-12 weeks. You can receive this amount if you meet the eligibility criteria and are not earning more than the allowed amount. For example, it may impact Income Support, Pension Credit, or Universal Credit. If your circumstances change, such as your income or how much time you spend caring, you must report these changes to the Carer’s Allowance Unit. Failure to do so may result in an overpayment or even prosecution. Carer’s Allowance is not the only support available to carers. How Does Universal Credit Work in the UK? Universal Credit is a benefit provided by the UK government to support individuals who are working or looking for work, but need help with living costs. It’s a single payment that combines six previous benefits. To qualify for Universal Credit, you must: Be aged 18 or over (some 16-17-year-olds may also be eligible) Be under the State Pension age Live in the UK Have less than £16,000 in savings (or £24,000 for couples) Be available to start work immediately Not be in full-time education or studying for 21 hours or more per week You can apply for Universal Credit online, by phone, or in person at Jobcentre Plus. You’ll need to provide personal details, proof of identity, and information about your income, expenses, and circumstances. Universal Credit is calculated based on your circumstances. You’ll receive a standard allowance, plus additional amounts for things like: Housing costs Childcare expenses Disability or health conditions Caring responsibilities Your payment will be reduced by: 63p for every £1 earned above the work allowance (£198 per month for most claimants) Any other benefits or income you receive Universal Credit is paid monthly, usually into your bank account. You’ll receive a single payment covering all your eligible costs, including housing and childcare expenses. You’ll need to manage these costs yourself, rather than receiving separate payments for each. The work allowance is the amount you can earn before your Universal Credit payment starts to reduce. The taper rate is the amount your payment decreases for every £1 you earn above the work allowance. The standard work allowance is £198 per month, and the taper rate is 63p per £1. To receive Universal Credit, you’ll need to agree to a Claimant Commitment, outlining your responsibilities, such as: Actively seeking work Being available to start work immediately Attending interviews and training sessions Failing to meet these conditions may result in sanctions, reducing or stopping your Universal Credit payment. You must report any changes in your circumstances, such as income, expenses, or family changes, to the Universal Credit helpline or online. Failure to do so may result in an overpayment or even prosecution. Does Carers Allowance Affect Universal Credit? Receiving a Carer’s Allowance can reduce your Universal Credit payments. This is because Carer’s Allowance is considered unearned income, and it’s treated as a source of income when calculating your Universal Credit entitlement. For every £1 you receive in Carer’s Allowance, your Universal Credit payment will be reduced by 63p. The taper rate and work allowance can also affect how the Carer’s Allowance impacts your Universal Credit. If you’re eligible for a work allowance, you might be able to earn a certain amount of money without reducing your Universal Credit. However, receiving a Carer’s Allowance can reduce this work allowance. Overlapping Benefits If you’re receiving other benefits, like Income Support or Employment and Support Allowance, you might not be eligible for Universal Credit if you receive Carer’s Allowance. This is because these benefits can overlap, and receiving Carer’s Allowance might make you ineligible for Universal Credit. It’s essential to consider the impact of Carer’s Allowance on your Universal Credit payments before applying. You might want to consult with a benefits advisor or use an online benefits calculator to understand how Carer’s Allowance will affect your Universal Credit entitlement. Remember, receiving a Carer’s Allowance can provide valuable support for your caring role, but it’s crucial to understand the potential effects on your overall benefits. The Bottom Line Receiving a Carer’s Allowance and Universal Credit can be a complex and confusing experience. But understanding does Carers Allowance affects Universal Credit is crucial to ensuring you receive the support you need. In conclusion, Carer’s Allowance is treated as income for Universal Credit purposes, reducing your payment pound for pound. However, claiming both benefits can still provide vital financial assistance. To maximise your benefits, carefully manage your income, report changes promptly, and seek expert advice. A Carer’s Allowance can impact other benefits, …

Read more