Child Tax Credit In The UK In 2025

Welcome to UK Immigration Navigator, in this article we going to cover the Child Tax Credit in the UK in 2025

One of the key pieces of that puzzle in the UK has been the Child Tax Credit. While it’s been a crucial lifeline for many, it’s important to understand that the Child Tax Credit UK is no longer open to new claims and has largely been replaced by Universal Credit. So, why are we talking about it for 2025? Because many families are still receiving it, and it’s vital to understand how this older system works, particularly if it impacts your current support. This article will explain what you need to know about the Child Tax Credit, specifically focusing on the situation you might encounter in 2025.

Before diving into the specifics of Child Tax Credit, let’s be clear: Child Tax Credit is closed to new claims. It’s been gradually phased out as part of the government’s welfare reform and replaced by Universal Credit. If you’re eligible for support with childcare costs, you would now claim this as part of your Universal Credit award. However, millions of families still receive Child Tax Credit UK because they were receiving it before the Universal Credit rollout and haven’t moved over. These are called “legacy claimants,” and they will continue to receive their Child Tax Credit UK as long as their circumstances don’t change significantly.

Read Also: Childcare in the UK

Important Update: Child Benefit Rates for 2025-26

While there are no changes to Child Tax Credit rates planned (more on that below), there are changes to Child Benefit payments coming into effect. Here’s what you need to know:

Eldest Child: The Child Benefit rate for your eldest or only child will increase from £25.60 to £26.05 per week.
Other Children: The rate for any subsequent children will increase from £16.95 to £17.25 per week.
Guardian’s Allowance: If you receive Guardian’s Allowance, this will increase from £21.75 to £22.10 per week.

These changes are important for families claiming Child Benefit, which is separate from Child Tax Credit, although can be affected by it, and is the benefit to claim for those with children who are not yet claiming Universal Credit.

Child Tax Credits: No Changes in 2025-26

It’s important to note that there will be no changes to Child Tax Credit rates in the tax year 2025-26. This is because no new Child Tax Credit awards will be made after April 5, 2025. All new claims for support will be through the Universal Credit system. The focus for those on the Child Tax Credit will be maintaining eligibility based on existing rules, not on any rate changes for the future.

So, when we talk about the Child Tax Credit UK in 2025, we’re talking about:

Existing recipients: Families who have already received Child Tax Credit but haven’t switched over to Universal Credit.
Maintaining eligibility: Understanding how changes in circumstances could affect their Child Tax Credit payments.
Potential future changes: While there are no major changes announced for 2025, being informed about the system remains vital.

Who Is Still Receiving Child Tax Credit UK?

You may still be receiving Child Tax Credit if:

You were already claiming it before the Universal Credit rollout in your area.
You have not experienced a significant “change of circumstance” that would trigger a move to Universal Credit. Examples of this include moving home, changing employment status, or taking a long break from employment and then returning (such as maternity leave ending),.

Key Elements of Child Tax Credit UK

Here’s a breakdown of how the Child Tax Credit works for those who are still receiving it:

Basic Child Element: This is a standard amount for each child you’re responsible for. It’s usually the main portion of your Child Tax Credit.
Additional Elements: You could receive extra amounts if:
- Your child has a disability.
- You are a single parent (formerly known as the lone parent element)
- You had a baby between April 6, 2017, and April 5, 2023 (known as the first child premium, this is only applicable to children born within that period).
Income Limits: Your Child Tax Credit amount is affected by your annual income. The higher your income, the less you may receive. The exact income thresholds and tapers will vary depending on your circumstances.
Payment Schedule: Child Tax Credit is typically paid directly into your bank account, usually every week or every four weeks.

What to Expect in 2025 (and Beyond)

While there are no major planned changes announced to the Child Tax Credit for 2025, the following principles continue to apply:

Continued Payments: If you’re currently receiving Child Tax Credit and your circumstances haven’t changed significantly, you should continue to receive payments.
Potential Switch to Universal Credit: If you experience a significant change in circumstances, the DWP will likely require you to claim Universal Credit. Once you are on Universal Credit, you will no longer receive Child Tax Credit.
Annual Reviews: HMRC usually reviews your Child Tax Credit claim annually. They will ask you to confirm your details and may make adjustments based on any income or circumstance changes you report.
Importance of Reporting Changes: It’s crucial to report any changes in your circumstances immediately to avoid overpayment or underpayment of benefits. Changes to report include changes to income, changes to addresses, or changes to your household composition (for example a new partner moving in).

Common Scenarios and Considerations

Changes in income: If your income increases significantly, your Child Tax Credit payments may be reduced or stopped.
Changes in child’s living arrangements: If a child moves out of your household, your Child Tax Credit payments will be adjusted.
Couples: For couples, the Child Tax Credit is usually paid to one account.
Working Families: Child Tax Credit is not designed only for those not working; working families can also be eligible.
Tax Credit Helpline: If you have questions about your Child Tax Credit, you can contact the Tax Credit Helpline. They are best positioned to discuss details of your payments and situations.

Staying Informed

The landscape of benefits is constantly evolving. It’s important to stay informed by:

Checking the official government website (gov.uk): This is the best source for up-to-date information.
Using reputable advice services: Citizens Advice and Turn2Us are two valuable resources.
Keeping HMRC Updated: Make sure HMRC has your correct details to make sure they can communicate about your Child Tax Credit.

FAQ

Q: Can I still apply for a Child Tax Credit in 2025?
A: No, the Child Tax Credit is closed to new claims. New applicants must apply for Universal Credit if they think they are eligible for support.

Q: I’m already on Child Tax Credit, what happens now?
A: If you have not had a significant change of circumstance, your payments should continue as normal and you will be informed of any changes. You may be contacted by DWP to be moved to Universal Credit, but this should not happen without you being contacted.

Q: What changes trigger a move to Universal Credit?
A: Significant changes can include changes to employment status (including starting work, leaving work, or changing your working hours), moving to a new address, taking a long break from work, or changes to your household composition (such as a new partner moving in).

Q: Will my Child Tax Credit payments increase in 2025?
A: There are no changes currently announced to the Child Tax Credit for 2025.

Q: What’s the best way to contact someone with questions about my Child Tax Credit?
A: You should contact the tax credits helpline, who will be able to advise you on your claim.

Q: Where can I get free and independent advice?
A: Citizens Advice and Turn2Us are two excellent resources for free and independent advice about your benefits.

Q: What happens if I don’t report a change in circumstances?
A: Failure to report changes can lead to an overpayment of benefits which you may need to pay back to the government.

In Conclusion

While the Child Tax Credit is a closed system, it’s still a crucial part of the financial landscape for many families. For those continuing to receive it, it’s vital to stay informed and understand how your payments could be affected. While there are no significant changes anticipated for 2025, by staying up-to-date, you can ensure you’re receiving the right support and are prepared for the continued transition towards Universal Credit. Remember to seek reliable advice if you have any concerns.