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Wednesday, 3 October 2023

Tax credits if you or a member of the family goes into custody

If you or someone in your family is sent to prison or a young offenders' institution, or remanded in custody, your tax credits may be affected. You need to tell the Tax Credit Office as soon as possible so they don't pay you too much.

Can you still get tax credits if you – or your partner - are sent to prison?

If you are single, you won’t be able to get Working Tax Credit if:

  • you are sent to prison
  • you are remanded in custody awaiting trial or sentence
  • you are sent to a young offenders' institution

If you’re in a couple you may still be able to get tax credits if you - or your partner - are:

  • sent to prison
  • remanded in custody awaiting trial or sentence
  • sent to a young offenders' institution

If you're in a couple, you can only carry on getting Working Tax Credit if the person who hasn't gone to prison still works. They'll need to be working at least 16 or 30 hours a week, depending on their circumstances.

Work done inside or outside a prison whilst serving a sentence or on remand won't count as work for Working Tax Credit purposes. But any pay for this work will be counted as income when working out tax credits payments.

How your tax credits payments are affected

How your payments are affected depends on if you're single or in a couple, and whether you have children.

If you're single

Your Working Tax Credit will stop. If you have children, your Child Tax Credit may also stop.

If you're in a couple with children

Your Child Tax Credit will carry on.

But your Working Tax Credit will stop unless the person who hasn’t gone to prison works at least 16 hours a week.

If you're in a couple and don’t have children

Your Working Tax Credit will stop unless the person who hasn't gone to prison is working. They'll normally need to be working at least 30 hours a week, unless they are disabled or aged 60 or over.

One of you might be sent to prison for more than 12 months. If so, your extra tax credits for there being a second adult in your household will stop.

What happens to your tax credits when you are released from prison?

If you and your partner were entitled to tax credits and then you're released from prison, tell the Tax Credit Office as soon as possible. They will review your tax credits entitlement.

If you weren't entitled to tax credits whilst you were in prison, you may be able to claim tax credits again when you are released. This is even if you are:

  • put on probation
  • electronically tagged
  • released on parole

Your child is sent to prison - how is your Child Tax Credit affected?

If your child is sentenced to:

  • four months or less in custody or detention, your Child Tax Credit won't be affected - as long as you are still responsible for them
  • more than four months in custody or detention, you won't get Child Tax Credit for them while they serve their sentence

If you're getting Child Tax Credit for your other children, this will continue.

You should tell the Tax Credit Office as soon as possible if your child is released from custody or detention. You may be able to get Child Tax Credit for them again once they are released.

Keeping the Tax Credit Office up to date

You must tell the Tax Credit Office by calling the Tax Credit Helpline as soon as possible if you, your partner or your child are:

  • sent to prison
  • remanded in custody awaiting trial or sentence
  • sent to a young offenders' institution
  • released from any of the above

Telling the Tax Credit Office about these changes will help you avoid being paid too much or not enough tax credits.

Provided by HM Revenue and Customs

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