Tax credits and students
There are no special rules for students in the tax credits system – you have to meet the same qualification criteria as everyone else. This means you need to meet the age and hours requirements for working tax credit and you must be responsible for a child or young person to claim child tax credit.
This page focuses on particular parts of the system that may be of interest to students.
The Government is gradually introducing universal credit (UC), a new benefit which will eventually replace tax credits, and some other social security benefits. Universal credit is now available across the UK and most people are no longer able to make a brand new claim for tax credits and are expected to claim UC (or pension credit) instead. Existing tax credit claimants are expected to be moved across to universal credit in a managed exercise between 2020 and 2023. This will follow a pilot involving up to10,000 people who will be moved between July 2019 and July 2020. You can find out more about this in our Universal Credit section.
The UK left the European Union (EU) on 31 January 2020 and entered a transitional period, currently due to end on 31 December 2020, during which EU law continues to apply in the UK. The UK’s relationship with the EU beyond the end of the transitional period has not yet been finalised. Please note that the guidance below reflects the law as it applied before the UK’s departure from the EU, and as it will continue to apply throughout the transitional period.
You can claim tax credits while you are a student, provided you meet the qualifying rules.
If you want to claim working tax credit, you will need to do paid work in addition to your studies. Any time spent working which is part of your studies will not count as remunerative work.
If you do not have any children and do not have a disability, you will need to be aged at least 25 and work at least 30 hours a week to get working tax credit. If you have a disability that means you qualify for the disability element of working tax credit, you can claim working tax credit from age 16 if you work at least 16 hours a week.
If you are single and have at least one child, you can claim child tax credit. from age 16 and working tax credit if you work at least 16 hours a week. If you have a partner, then to get any working tax credit you will need to work 24 hours a week between you, with one of you working at least 16 hours a week. There are some exceptions to this 24-hour rule if your partner is incapacitated, in prison, in hospital or entitled to carer’s allowance. In that situation you will qualify for working tax credit by working at least 16 hours a week.
You can find out more about what counts as qualifying remunerative work on GOV.UK.
For tax credits, it does not matter whether you are studying full-time or part-time; you can claim tax credits if you meet the qualifying conditions.
You can claim tax credits as an apprentice provided you meet the qualifying conditions.
Whether the hours of work you do as an apprentice count as remunerative work for working tax credit purposes will depend on the way your apprenticeship is set up. HMRC say that the hours you work as an apprentice will count as remunerative work for tax credits if:
- you have a contract of employment for your apprenticeship
- you are attending a scheme (apprenticeship) where your payment is classed as earnings (as opposed to reimbursement of expenses) and subject to income tax and National Insurance contributions.
However, if you only receive a non-taxable training allowance, monies in connection with participating in the Intensive Activity Period (part of jobseeker’s allowance schemes), a sports award or no money other than tax-exempt discretionary payments, your apprenticeship working hours will not be classed as being in remunerative work.
This means that if you have a contract of employment and your pay is classed as taxable earnings, not just reimbursement of expenses or a non-taxable training allowance, it should be classed as remunerative work for working tax credit.
To claim tax credits, you need to meet the tax credits residence rules that are found on our main LITRG website.
You should also have a National Insurance number. If you do not already have one, you will be invited to have one allocated so you will need to have enough information to have a National Insurance number allocated.
You will be asked to attend an interview with the Department for Work and Pensions (DWP) who will decide whether you can have a National Insurance number. Even if they decide not to give you one, they will confirm your identity and tell HMRC that it has been checked, which will allow HMRC to process your tax credits claim without a National Insurance number.
You need to remain present in the UK while you get tax credits, although the rules allow for temporary absence so that, if the absence is not expected to last more than 52 weeks at the outset, the first eight weeks of a temporary absence abroad you will be treated as still in the UK (this period can be extended up to 12 weeks if in connection with ill health or bereavement). After this period, you will not be treated as being in the UK and your entitlement will end. If you return to the UK, you will need to make a fresh claim. You should keep the Tax Credit Office advised if you are going abroad, whether as part or your studies or not, so that your award can be adjusted if necessary and to reduce the chance of overpayments at the end of the tax year.
There are some exceptions for people who go abroad who are claiming certain UK state benefits. You can find our more on GOV.UK.
Any taxable earnings, most taxable State Benefits, self-employed income, some student income and any miscellaneous income is taken into account in full. Also any pension income, income from savings, foreign income and property income is added together and anything over £300 is also taken into account.
The rules around income can be found on GOV.UK.
If you get an Adult Dependants' Grant, or any dependants' grant if you are a student in Scotland, you need to declare that amount in full.
If you receive a scholarship or bursary, you do not need to declare those sums as income.