Financial expert Martin Lewis says millions will receive £500 in April due to Working Tax Credit - how to claim

Are you eligible for the payment? (Photo: Shutterstock)Are you eligible for the payment? (Photo: Shutterstock)
Are you eligible for the payment? (Photo: Shutterstock)

Money Saving Expert Martin Lewis has explained how millions of people around the UK can claim a one off payment of £500 Working Tax Credits payment.

During this week’s episode of ITV’s The Martin Lewis Money Show, the financial expert was asked by a viewer: “After your Budget last week, my question is, is everyone receiving working tax credits going to get an extra £500 in April, or just those who are furloughed?”

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Lewis replied: “If you were getting working tax credits on March 2, you will get the £500. Whether you are furloughed or not is irrelevant.”

How to claim

If you’re part of a working household that receives tax credits, you could be eligible for the one off payment of £500. The payment is being introduced in order to provide extra support when the temporary increase in Working Tax Credit ends as planned on 5 April 2021.

You do not need to apply for a new payment - the HMRC will contact you by text message or letter in April to confirm you are eligible. You don’t need to contact the HMRC either.

If you are eligible for the payment, you should receive it by 23 April 2021 via the same method you normally get your tax credits paid.

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The payment is available to those who, on 2 March 2021, received:

  • Working Tax Credit payments
  • Both Working Tax Credit and Child Tax Credit payments
  • Child Tax Credit payments, and are eligible for Working Tax Credit but do not get a payment because their income is too high

Who is eligible for Working Tax Credit?

To qualify for Working Tax Credit, you must work a certain number of hours a week:

  • Age 25 - 59, at least 30 hours a week
  • Aged 60 or over, at least 16 hours a week
  • If you are disabled, at least 16 hours a week
  • If you are single with one or more children, at least 16 hours a week
  • If you are in a couple with one or more children, usually at least 24 hours a week between you (with one of you working at least 16 hours)

There are some exceptions for couples with at least one child - you can still claim if you work less than 24 hours a week between you and one of the following applies:

  • You work at least 16 hours a week and you’re disabled or aged 60 or above
  • You work at least 16 hours a week and your partner is incapacitated (getting certain benefits because of disability or ill health), is entitled to Carer’s Allowance, or is in hospital or prison

Your work can be:

  • For someone else, as a worker or employee
  • As someone who’s self employed
  • A mixture of the two

The work must last at least four weeks, or you must expect it to last four weeks, and must be paid. This can include payment in kind (for example farm produce for a farm labourer) or where you expect to be paid for the work.

Paid work does not include money paid:

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  • For a ‘Rent a Room’ scheme (less than £7,500 or £3,750 for joint owners)
  • For work done while in prison
  • As a grant for training or studying
  • As a sports award

Some self employed people are not eligible for Working Tax Credit. To qualify, your self-employed work must aim to make a profit. It must also be commercial, regular and organised.

This means you might not qualify if you do not:

  • Make a profit or have clear plans to make one
  • Work regularly
  • Keep business records, such as receipts and invoices
  • Follow any regulations that apply to your work, for example having the right insurance of licence

If the average hourly profit from your self employed work is less than the National Minimum Wage, the HMRC might ask you to provide:

  • Business records
  • Your business plans
  • Details of the day to day running of your business
  • Evidence that you’ve promoted your business - such as advertisements or flyers

There is no set limit for income because it depends on your circumstances, and those of your partner where applicable.

How to apply

Unfortunately, you can no longer make a new claim for Working Tax Credit - instead, you can apply for Universal Credit.

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You could also potentially apply for Pension Credit if you and your partner are State Pension age or over.

To apply for Universal Credit, you can do so via the Government website.

You’ll need:

  • Your bank, building society or credit union details (if you do not have one, call the Universal Credit helpline on 0800 328 5644)
  • An email address
  • Information about your housing, for example how much rent you pay
  • Details of your income, for example payslips
  • Details of savings and any investments, like shares or a property that you rent out
  • Details of how much you pay for childcare if you’re applying to help with childcare costs

If you do not provide the correct information when you apply, it could affect how much you get paid, or when you get paid.

You’ll also need to verify your identity online - you’ll need some proof of identity, such as:

  • A driving licence
  • Passport
  • Debit or credit card