Tax Credits are available to people on a low income in the form of Child Tax Credit and Working Tax Credit. Although the Child Tax Credit is only available to those already receiving the Working Tax Credit, these two benefits are easily available for those who meet the qualifying criteria.
In certain situations, the two benefits may also be open to people planning to leave or settle down in the UK. This is the case when the claimant’s child lives overseas or when they are moving to the United Kingdom.
It should be noted that Tax Credits are now being replaced by Universal Credit. This means that all new applicants will receive Universal Credit, but those already in receipt of Tax Credits can continue to obtain the benefit.
Do You Have a Child Living Overseas?
Some people reside in the United Kingdom, but their children live outside the UK. If you receive the Working Tax Credit benefit, you can receive an extra payment in the form of the Child Tax Credit in the following scenarios:
- The applicant works in the UK
- Their children live in Norway, Switzerland, Liechtenstein, Iceland, or the EU
- The applicant supports the children financially
Furthermore, the applicant must meet one of these conditions:
- Be a Swiss or EEA citizen with pre-settled or settled status through the EU Settlement Scheme
- Be a dual national with one part a British citizenship and the other citizenship belonging to Norway, Switzerland, Liechtenstein, Iceland, or the EU
- Be covered by some other condition stated in the withdrawal arrangement with Norway, Switzerland, Liechtenstein, Iceland, or the EU
It is not possible to receive a Child Tax Credit if the children do not live in Norway, Switzerland, Liechtenstein, Iceland, or the EU. If the children are planning to move to the UK, the HMRC must be informed, as it may affect the payment amounts.
What If The Partner Receives Benefits In Norway, Switzerland, Liechtenstein, Iceland, or the EU?
Those with child(ren) and a partner who receives benefits from one of these countries: Norway, Switzerland, Liechtenstein, Iceland, or the EU, may find their Tax Credits affected. The HMRC must be informed to ensure the correct payments are calculated. In some scenarios, certain benefits count as income such as, for example, unemployment payments.
Going Overseas
If you are leaving the UK for 12 months or more, Tax Credits will end (see below for exceptions), and no payments will be made. For shorter periods, it is still possible to receive tax credits.
Some possible scenarios where it is feasible for the continuation of Tax Credit payments are shown below:
| Reason For Departing The UK | Tax Credit Availability |
| Medical treatment(s) for your child, yourself, or your partner | Less than 13 weeks |
| Death of a child, partner, or a relative of yourself or the partner | Less than 13 weeks. |
| Other reasons for e.g., business or holiday | Less than 9 weeks. |
There are two scenarios where it is possible to receive Tax Credits while overseas for more than 9 or 13 weeks. They are:
- Someone is moving abroad to an EU country
- Someone is posted overseas as a Crown Servant.
1. Moving To an EU Country
Suppose the claimant is moving to an EU country with a child; they could be eligible for a Child Tax Credit if they are receiving a State Pension or one of the following benefits:
- Incapacity Benefit
- Industrial Injuries Disablement Benefit
- Bereavement Benefit
- Severe Disablement Allowance and
- Employment Support Allowance (contributions-based)
It does not apply to non-EU countries unless the individual acts in a Crown Servant capacity (see below).
2. Crown Servants
Those who are Crown Servants posted in foreign countries may be entitled to receive Tax Credits. They are treated as an individual living in the UK if any of the following is applicable:
- Classed as an “ordinarily resident” (see below) in the UK before the overseas posting
- Completed a series of overseas posting without any breaks and was counted as an “ordinary citizen” before the first posting
- Classed as a resident in the UK as part of the Crown Servant duty before the overseas posting
What Is an Ordinarily Resident?
“Ordinarily Resident” describes someone who normally lives in the UK with plans to remain in the country. HMRC will decide if someone is an “Ordinary Resident” and will consider factors such as:
- The location of the settled home
- Where close family are located
- When the person arrived in the UK
- Whether there are plans to leave the UK permanently in the following two to three years
What If a Partner Is a Crown Servant?
Tax credits will continue to be paid if the partner is a Crown Servant posted in foreign countries and the person:
- Lives with their partner while they are working abroad
- Continues to live in the UK while the partner is working overseas
There is no need to be a UK “Ordinary Resident” while the partner serves as a Crown Servant.
Coming to the UK
If a person moved to the UK after 2 July 2014, and does not have a job, they must be in the country for at least 3 months before applying for Tax Credits. Exceptions are made in the following scenarios:
- A family member is self-employed or at work
- The Applicant was given discretionary leave to stay or enter the UK and eligible for benefits
- The Applicant is a displaced person given the right to stay in the UK and eligible for benefits
- Humanitarian protection has been granted
- A family member or the applicant was made redundant and in training or seeking a new job
- The Applicant was granted leave to stay in the UK and seeking settlement as a domestic violence victim
- The applicant was in employment but stopped temporarily due to an accident or health reasons
- The applicant has paid Class 1 and 2 NI contributions while abroad, and these contributions were paid 3 months before arriving back in the UK
It should be noted anyone who arrived in the UK in the last few years will be directed towards Universal Credit rather than Tax Credits.
Cross-Border Working and Those Subject to Immigration Controls
Tax Credits will continue for those who travel regularly overseas to work while also working in the UK. These people are treated in the same manner as ordinary UK residents. Individuals who arrive in the UK and are “under immigration controls’‘ usually cannot obtain Tax Credits. Also people with “no recourse to public funds” cannot receive Tax Credits. Exceptions will apply if the partner is in the United Kingdom and not under any immigration concerns.
The Application Process
You could be eligible for Tax Credits if you meet the criteria set out above. Like with all benefits, Tax Credit payments are paid into the applicant’s bank account.
Tax Credits Are Now Being Replaced
Tax Credits are not open to new applicants; new claimants will be directed towards Universal Credit. Those already receiving Tax Credits can continue with the benefit or apply for a form of Tax Credit they are not receiving. For example, if you receive a Working Tax Credit, you can apply for a Child Tax Credit, and vice versa. People moving overseas or coming to the UK can continue to enjoy these benefits, though new applicants will be paid through Universal Credit.
