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Who can leave tax credits?

Anyone can leave tax credits. You may have personal reasons for leaving, or you might have got a letter (TC1015) from the Tax Credit Office explaining that:

• your total annual income is too high to get payments of tax credits now - or is likely to be too high to get any payments from April 2012
• your tax credits claim will end from April 2012 - unless you get in touch

What are the income limits for tax credits?

At the moment, the income limit for getting payments of tax credits, for most people, is around £42,000.

From 6 April 2012, the income limit for you will depend on your own situation. But as a very rough guide, you might not be able to get any payments of tax credits if your income is more than around:

• £26,000 if you have one child
• £32,200 if you have two children
• £13,000 if you're single with no children
• £18,000 if you're in a couple with no children

You could still qualify from 6 April 2023 if your income is above these amounts. For example, if you pay for registered or approved childcare, are disabled, or have more than one or two children.

What to take into account before deciding to leave tax credits

If you decide you want to leave tax credits, the following will happen:

• your claim will end, and you'll need to make a new claim if your circumstances change - for example if your income drops or you have a new baby
• any new claim would only be backdated by up to one month (sometimes longer if you qualify for the Disability element of Working Tax Credit)
  

Any delay in making your new claim could mean you lose out on payments you may be entitled to.

Staying in tax credits means:

• your claim will continue, even if you haven’t been getting any payments
• you won't need to make a new claim if your circumstances change, for example if your income drops - you would just need to report the change to the Tax Credit Office
• you may be entitled to extra money for the whole tax year if your circumstances change or your income drops - for example if you lost your job

• Find out which changes of circumstances you need to report and when

• When your tax credits claim can be backdated

You currently qualify for the Disability element of Working Tax Credit

You may currently qualify for the Disability element of Working Tax Credit, even if you don't actually get any tax credits payments. Your latest award notice will tell you what you qualify for.

If this applies to you and you want to leave tax credits, you need to know that:

• you will need to make a new claim for tax credits if your circumstances change later on
• any new claim will only be backdated by up to one month (sometimes longer if you qualify for the Disability element)
• you may not qualify for the Disability element when you make the new claim - especially if there's a gap of eight weeks or more between leaving tax credits and making a new claim

If you decide to stay in tax credits, you can still qualify for the Disability element - as long as your circumstances stay the same.

• You have a disability - can you get extra Working Tax Credit?

What to do if the Tax Credit Office tells you your tax credits claim will end from April 2012

You might have received a letter (TC1015) from the Tax Credit Office, saying that:

• your income is too high to get payments of tax credits now - or is likely to be too high to get any payments from April 2012
• they will be ending your claim from April 2012 - unless you get in touch by the date shown in the letter

If you've had one of these letters, you need to:

• decide whether you want your claim to continue - even if you won’t get any payments
• contact the Tax Credit Helpline, or write to the Tax Credit Office, by the date shown in the letter if you want your claim to continue

Get in touch straight away if your circumstances have changed but you haven’t told the Tax Credit Office - you could still get some payments. For example, you might have had a new baby or a drop in income, or you think your income is going to drop.

The income limits for tax credits given in the letter are only a guide. If your income drops, even if it's still higher than the limits given in the letter, you could still get some tax credits payments. This is because the income limit for you will depend on your own circumstances.

It's particularly important to get in touch straight away if either of the following apply:

• you think your total income for the tax year 2011-12 will be less than your total income for the tax year 2010-11
• you think your total income will drop for the whole of the tax year 2012-13

A tax year runs from 6 April one year to 5 April the next.

• Contact details for the Tax Credit Helpline and Tax Credit Office

If you don’t contact the Helpline or Tax Credit Office in time

If you don't get in touch by the date shown in the letter, the following will happen:

• your claim will end on 5 April 2023
• you'll be sent an Annual Review form (TC603R) with instructions telling you what you need to do

It's important to follow the instructions that come with the Annual Review form. This is so the Tax Credit Office can make sure you were paid the right amount for your claim up to 5 April 2012.

What to do if you decide to leave tax credits for any other reason

You can leave tax credits at any time for your own personal reasons. You can do this by:

• contacting the Tax Credit Helpline
• writing to the Tax Credit Office

You need to get in touch by 31 July if you want your claim to stop for the current tax year. If you get in touch at any other time, your claim will carry on until the end of the current tax year. For example, if you got in touch in September 2012, your claim would carry on until 5 April 2013, when it would end.

If you want your claim to stop for the current tax year, you may be asked to repay any money you shouldn’t have had since 6 April.

• Contact details for the Tax Credit Helpline and address of the Tax Credit Office

Changing your mind about leaving tax credits

Once you have left tax credits, you will need to make a brand new claim if you want to get tax credits again.

• How to claim tax credits

Need more help?

You can get more help from any of the following:

• the Tax Credit Helpline
• an independent adviser, for example the Citizens Advice Bureau or a Local Authority Welfare Rights Service
• anyone who acts on your behalf - it may help to show them any letter that you have been sent

• Contact details for the Tax Credit Helpline

• Find your nearest Citizens Advice Bureau on their website Opens new window

More useful links

• Check if you qualify for tax credits - quick questionnaire

• Tax credits: effect of Budget changes from 6 April 2023

• Repaying overpaid tax credits

• If you want someone to act on your behalf for tax credits