What exactly are Child Tax Credits in 2025?
Child Tax Credits help families with the costs of raising children through regular tax credit payments from the government. These payments can make a real difference to your household budget.
These credits are designed to support parents and guardians, giving you extra money based on your income and family situation. Many parents aren’t claiming the full amount they’re entitled to.
Understanding the basics is important to ensure you receive what you’re due. When I first navigated this system as a new parent, I was surprised by how much support was available.
How much money can you get from Child Tax Credits?
In 2025, Child Tax Credits can give you up to £3,885 per year for your first child, which works out to about £324 per month. For each additional child, you could receive up to £3,235 yearly - around £270 monthly.
The following table outlines the maximum amounts you can receive for each child.
The actual amount you’ll get depends on your income. Lower-income families typically receive the maximum amount, while payments reduce for higher earners.
If you earn above £17,005 per year, your payments start to reduce. For every £1 you earn above this threshold, your credit goes down by 41p.
A family with two children and income below the threshold could receive up to £7,120 per year in total Child Tax Credits. This substantial sum can significantly help with everyday expenses.
Who can claim Child Tax Credits in 2025?
You can claim if you’re responsible for at least one child under 16. Children under 20 who are in approved education can also qualify, extending support through important educational years.
Both working and non-working parents can claim, though your income affects how much you get. Single parents and couples can both apply for these credits.
It’s worth noting that most new claimants now need to apply for Universal Credit instead of making a new claim for Child Tax Credits. This represents a significant change in the benefits system.
You don’t need to be the child’s biological parent - guardians and some foster carers can also claim. This inclusive approach ensures children receive support regardless of family structure.
How does your income change your Child Tax Credit amount?
The basic income threshold is £17,005 per year. If you earn less than this, you’ll get the maximum credit amount, providing full support to those who need it most.
For families with different circumstances, different thresholds might apply. Self-employed earnings count towards your total income when calculating your credits.
Child maintenance payments don’t count as income for tax credit calculations, which is good news for single parents. This policy recognizes the unique financial challenges they face.
If your income changes during the year, you should report it right away as it might affect your payments, especially if your income is lower than expected. Staying current with HMRC ensures you receive the correct amount.
When and how will you receive your Child Tax Credits?
Payments usually come every four weeks directly into your bank account. If you prefer, you can ask to receive weekly payments instead to help with regular budgeting.
New claims typically take up to 5 weeks to process, so apply as early as possible. The tax credit year runs from April to April, with payments continuing throughout the year.
How do you apply for Child Tax Credits?
Most new claimants now need to apply for Universal Credit instead of Child Tax Credits. If you’re already receiving Child Tax Credits, you can renew your claim via the HMRC website or helpline.
You’ll need details about your income and your children when you apply. Keep all your paperwork and reference numbers handy for when you contact HMRC. You may also receive a letter from HMRC with instructions on how to renew your claim.
Late applications might result in missed payments, so don’t delay if you think you’re eligible. Being organised with your application can prevent unnecessary financial stress.
What's the difference between Child Tax Credits and Child Benefit?
Child Benefit is separate from Child Tax Credits and is paid to almost all parents regardless of income, unlike other benefits which may be means-tested. You can claim both benefits at the same time if you’re eligible.
Child Benefit pays £24.00 weekly for your first child and £15.90 for additional children. While Child Tax Credits are means-tested, Child Benefit is only reduced if one parent earns over £50,000.
The application process is different for each benefit, so you need to apply for them separately. Understanding these distinctions helps ensure you access all available support.
Universal Credit and Child Tax Credit
Universal Credit has replaced Child Tax Credit, which ended on 5 April 2025. If you were receiving Child Tax Credit, you should have been invited to claim Universal Credit or Pension Credit before the deadline. Universal Credit is a means-tested benefit designed to support low-income families and individuals who are struggling to make ends meet. It takes into account your income, savings, and personal circumstances to determine the amount of support you receive.
Child Tax Credit was a tax credit element that provided financial support to families with children. It was payable to individuals responsible for at least one child or young person, with the amount received depending on income, the number of children, and whether any children were disabled.
Universal Credit, on the other hand, has different allowances and rules. For example, it considers your savings, whereas Child Tax Credit did not. Additionally, Universal Credit has a different income threshold and taper rate, which means the amount you receive may change as your income changes. Understanding these differences is crucial to ensure you continue to receive the support you need.
Making the most of your Child Tax Credits
Understanding how much Child Tax Credits you can get makes a big difference to your family budget. Always check your eligibility regularly, as it can change with your circumstances or government updates.
For the most accurate information about your specific situation, contact HMRC directly or use their online calculator. Remember to report any changes promptly to make sure you don’t miss out on the right amount.
If you’re self-employed or have more complex tax needs, Pie is the UK’s first personal tax app that helps working individuals handle their tax burdens. With integrated bookkeeping and real-time tax figures, it makes managing your taxes alongside family benefits much simpler.
Getting Advice and Support
If you’re unsure about your next steps or need help with claiming Universal Credit or Pension Credit, it’s essential to seek advice. You can contact the Universal Credit Migration Notice Helpline on 0800 169 0328 for guidance. Additionally, speaking with a benefits adviser or a financial expert can provide you with the information you need to make informed decisions about your financial situation.
Acting quickly is crucial, especially since the deadline for claiming Universal Credit or Pension Credit was 5 April 2025. Online resources, such as benefits calculators, can also be incredibly helpful. These tools can give you a detailed overview of what benefits you might be eligible for and how much money you could receive.
Remember to keep thorough records of your income, savings, and circumstances, as these will be required when claiming Universal Credit or Pension Credit. Reporting any changes in your circumstances promptly is also essential to ensure you receive the correct amount of benefits. Seeking advice and staying informed can make a significant difference in managing your financial support effectively.
