The tax credit system is complicated and that's one reason why some women lose out - make sure you're not one of them.

Many women don’t currently claim tax credits because they don’t know whether or not they’re entitled to receive them and they’re worried about having to pay back money they shouldn’t have received. But tax credits can make a difference to your income, especially if you’re entitled to working tax credit when you can also claim towards the cost of child care. The government changed the rules recently so that anyone who’s been paid too much in tax credits will only have the difference between what they should have received and what they’ve been paid clawed back. Under the old system, you had to pay the lot back and make a new claim, which could mean a wait before your new claim is processed.

Tax credit rules
Under the rules, the amount of tax credit you’re entitled to depends on your household income. In working out how much you’re entitled to, HM Revenue & Customs estimates your payment based on your previous tax year’s income and it’s up to you to tell them if your circumstances have changed.

• The type of claim you make depends on whether or not you live with someone. If you live alone, you should make a single person’s claim but if you’re part of a couple who live together, you should make a joint claim.

SAVVY TIP: It sounds straightforward but problems can arise if your relationship breaks down or if your partner starts staying at your house and moves in gradually. You have to tell HM Revenue & Customs about any change in circumstances (such as your boyfriend moving in with you or your relationship breaking up) within one month.

Who can claim Working Tax credit?
There are two types of tax credit, working tax credit and child tax credit. The Low Incomes Tax Reform Group, which campaigns for a simpler tax system to help people on a low income, says there are four situations in which you can claim working tax credit:

• If you’re responsible for at least one child you can claim if you’re aged 16 or over and you or your partner work at least 16 hours a week.

If you’re not responsible for a child, you can claim working tax credit:

• If you’re aged 25 or over and work at least 30 hours a week,

SAVVY TIP: According to LITRG, your working tax credit entitlement is based on the amount you earned in the last tax year or the current tax year, whichever is the lower (unless your income rises to £25,000 or more).

• You can also claim if you’re aged 50 or over and are coming back into work having recently received certain benefits.

SAVVY TIP: If you’re claiming working tax credit having found work through Jobcentre Plus, you’ll automatically be able to backdate your claim for three months. But if you contact HMRC directly yourself, you won’t automatically be offered the three month backdating, instead you have to ask for it.

• You can also claim if you’re aged 16 or over, work at least 16 hours a week and have a disability that affects your ability to get a job and you receive (or have recently received) certain disability benefits.

SAVVY TIP: A good place to go for information about tax credits is Citizens Advice online advice service Adviceguide. It has information about tax credits.

Child tax credit
You can normally claim child tax credit if you’re a parent or have the main responsibility for at least one child under the age of 16. You don’t have to be working to claim it, but you do have to tell HMRC about you and your partner’s income and any other children in your family.

Tax credits are means tested so the amount you receive will depend on your household income.

• You must not receive more than £58,175 a year (either on your own or between you and your partner, if you live together).

• You must not receive more than £66,350 if you have a child under the age of one.

The amount of child tax credit you receive is made up of several different parts and you could qualify for more than one of them. They are:

• A family element, worth up to £545 each year
• A child element, worth up to £2,235 a year for each child in your family (rising to £2,300 a year from April 6th)

• Extra money for children who have disabilities. The amount you receive will depend on how severely disabled your child or children are, but could be £2,670 (rising to £2,715 from April 6th) and more if your child is severely disabled.

SAVVY TIP: There is information on tax credit rates and allowances on HM Revenue & Customs' website. If you think you’re entitled to child tax credits, ring the tax credit helpline on 0845 300 3900. Make sure you have your National Insurance number handy as you’ll be asked it.

Useful links:
The website Entitled to can help you work out which benefits you may be eligible for.

Paying for childcare, a website produced by the Daycare Trust has a useful tax credit checker.

SAVVY HELP: John Whiting, tax policy director at the Chartered Institute of Taxation and a member of the Low Incomes Tax Reform Group is one of SavvyWoman's panel of experts. Why not ask John a question about tax credits by clicking here?