Income from ISAs is ignored when calculating entitlements to Working Tax Credit or Children's Tax Credit
. The family element of child tax credits, worth up to pounds 1,090 for a child under the age of one, only starts to reduce when family income exceeds pounds 50,000 a year, so this exemption can help even higher-rate taxpaying families.
They and others have been left struggling to make ends meet since a change to the system in April, which saw Child Tax Credit and Working Tax Credit replace Working Families' Tax Credit, Disabled Person's Tax Credit and Children's Tax Credit
Many will have seen the adverts about the Children's Tax Credit
The children's tax credit
replaces child tax allowances and is paid to the person who mainly looks after the children.
A: Child Tax Credits, combined with Working Tax Credits, replaced existing Working Families' Tax Credit, Disabled Person's Tax Credit and Children's Tax Credit
The existing Working Families Tax Credit has been scrapped, along with the Children's Tax Credit
. The new system aims to be more generous to low earners with no children and to better-off parents.
This month sees the introduction of the working tax credit, which replaces the working families' tax credit and the disabled person's tax credit; the child tax credit, which replaces the children's tax credit
; a 1 per cent increase in national insurance contributions; flexible working arrangements for parents; and extended maternity leave rights.
From April Gordon Brown has announced that the new Child Tax Credit will replace the existing Children's Tax Credit
. All families with a joint income of up to pounds 58,000 will be entitled to claim.
Leigh, 30, and Kevin, 52, were just over the pounds 40,000 annual income threshold to claim the old children's tax credit
introduced in 2001.
Since mid-August the Inland Revenue has been issuing claim packs to existing Working Families' Tax Credit, Disabled Person's Tax Credit and Children's Tax Credit
One in four families currently receives the working families tax credit, while 85 per cent benefit from the children's tax credit
, introduced last April.
THE pre-Budget statement that all support for children is to be paid to the main carer, with the new Children's Tax Credit
merged with Child Benefit, was welcomed by Professor Ian Walker (above) an economics professor at the University of Warwick.