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Child and Working Tax Credits Finalised Annual Awards 2005 to 2025 Main Commentary

Published 25 September 2025

1. About this release

This publication covers individuals or couples (described as families) who had claimed, and were eligible for, Child Tax Credit (CTC) or Working Tax Credit (WTC) for all or part of the tax year reported from tax year ending 2005 up to and including tax year ending 2025.

1.1 What were tax credits?

Tax credits were a system of financial support for families and can be claimed jointly by couples or single adults. The amount of support is known as a family’s ‘entitlement’.

A family’s entitlement changed with their daily circumstances and was based on the following factors:

• age
• income
• hours worked
• number and age of children
• childcare costs
• disabilities

Tax credits ended on 5 April 2025.

1.2 Overview publication

Previous HMRC statistics on tax credits were published as provisional or finalised awards, where provisional awards were the caseload position at a snapshot in time and finalised awards were a complete retrospective picture for the year once all family income and circumstances were known.

Across the 20-year period of producing these statistics, the production process was subject to various changes making comparison across the timeseries difficult. This publication applies a new consistent methodology across all years. This means that statistics in this publication may differ to previously published figures. In all cases, this publication should be used over previously published statistics. A list of changes in methodology are explained in the Background and Definitions.

1.3 Nominal figures

These statistics are nominal figures, which means they reflect the value (£) of awards at the time and do not consider inflation, meaning they are not strictly comparable between years.

1.4 Exclusion of family premia Department for Work and Pensions (DWP) data

DWP family premia data covers Income Support and Job Seekers Allowance (ISJSA) families paid by DWP whilst waiting to migrate over to CTC. ISJSA families were historically included in HMRC tax credits statistics to ensure a consistent timeseries once these families had migrated to CTC. These cases have now been removed from the figures as the data is separately collected by DWP and not directly related to HMRC tax credits.

Example of impact of removal of family premia on figures

The removal of the family premia data has had a large impact on figures for out of work families with children. For example, previously published figures for tax-year-ending 2006 show an average of 1.4 million out-of-work families with children, whilst the corresponding figure for the new timeseries is 757,000.

Previously published data split out the ‘out-of-work families with children’ total into ‘receiving CTC’ and ‘receiving family premia in benefits’. The new figure for out-of-work families is similar to the old ‘receiving CTC’ figure, showing the large differences seen in out-of-work families with children are the result of the removal of the family premia data.

Table 1: Number of out-of-work families with children claiming tax credits, new and old publications compared

Publication	Category	Number of families
Old	Out of work, with children - total	1.4 million
Old	Out of work, with children - receiving CTC	758,000
Old	Out of work, with children - receiving family premia in benefits	649,000
New	Out of work, with children	757,000

2. Main headlines

2.1 Average family count

The number of families claiming tax credits rose from 5.0 million in tax year ending 2005 to a peak of 6.2 million in tax year ending 2011, then fell sharply to 4.6 million in tax year ending 2013 and declined for the remainder of the timeseries until reaching 199,000 in tax year ending 2025.

Figure 1: Average family count (millions) receiving tax credits, from tax year ending 2005

2.2 Average annualised entitlement

Average annualised entitlement for tax credits claimants steadily rose from £2,800 in tax year ending 2005 to £4,500 in tax year ending 2011, where there were changes to the tax credit system. This continued to sharply rise to £6,200 in tax year ending 2013, the start of Universal Credit (UC) rollout. After this, average annualised entitlement continued to rise at a slower rate until tax year ending 2021, when the temporary WTC uplift introduced in April 2020 under the COVID-19 support scheme caused average annual entitlement to rise to £7,500. This was soon followed by a fall in average annual entitlement, as a result of the removal of the WTC uplift in tax year ending 2022. Average annual entitlement then rose from tax year ending 2022 onwards until its peak at £9,200 in tax year ending 2025.

Figure 2: Average annualised entitlement (£) of families receiving tax credits, from tax year ending 2005

2.3 Policy changes

There have been several policy changes during this period which have impacted these figures. These are:

• changes to the tax credit system implemented in April 2011
• start of the Universal Credit (UC) rollout in April 2013
• the full rollout of the digital UC service across the country in December 2018
• the closure of new tax credits claims in December 2018
• the temporary WTC uplift from April 2020 to April 2021

3. Tax credit group

The largest tax credit group between tax year ending 2005 and 2011 was in-work CTC only (around 3 million families), which until tax year ending 2012 was split into claimants receiving:

• the family element (basic element for CTC)
• more than the family element (due to qualifying for additional elements)
• and less than the family element (due to tapered awards)

Of these, the majority of families (2.0 million) in tax year ending 2005 claimed the family element, whilst more than the family element and less than the family element were made up of 675,000 and 124,000 families respectively.

During the period to tax year ending 2011, the number of families claiming the family element of in-work CTC only fell to 1.5 million, with only small changes across more than the family element and less than the family element.

In tax year ending 2012, the second income threshold rate increased from 7% to 41% with the number of in-work families claiming CTC only:

• falling by around a third to one million for the family element
• slightly increasing for the more than family element
• falling to 30,000 for the less than family element

The second income threshold was removed from tax year ending 2013 and in-work CTC was reported as single set of figures, starting at 838,000.

Both of these policy changes contributed to the fall in the total number of families claiming tax credits (Figure 1) and corresponding rise in average annualised entitlement (Figure 2) between tax years ending 2011 and 2013.

Figure 3: Average in-work family count (millions) receiving CTC by tax credit group, from tax year ending 2005

The second largest tax credit group in tax year ending 2005 was WTC and CTC (1.4 million families, rising to a peak of 2.0 million in tax year ending 2011). It became the largest tax credit group in tax year ending 2012, following the change to the second income threshold for CTC. There was a slight decrease to 1.8 million families in tax year ending 2013, when this threshold was then fully removed. The number of families then remained stable until tax year ending 2016, when the number of families has continued to decline.

The out-of-work CTC only tax credit group does not match the trend in other tax credit group and total families (Figure 1) by continuing to increase past tax year ending 2011 until its peak (1.4 million) in tax year 2013 and decreasing from there on.

The smallest tax credit group was consistently WTC only, which started with 230,000 claimants in tax year ending 2005, rising to its peak at just over half million in 2011, then falling for the rest of the timeseries.

Figure 4: Average family count (millions) receiving tax credits by tax credit group, from tax year ending 2005

4. Total annual entitlement

4.1 CTC entitlement

Total CTC entitlement (Figure 5) started at £10 billion in tax year ending 2005. It increased until its peak at over £21 billion between 2010 and 2017 before falling for the rest of the series.

4.2 WTC entitlement

WTC entitlement only increased until tax year ending 2011, doubling from £4.1 billion to £8.1 billion.

From tax year ending 2011 to the end of the timeseries, WTC entitlement fell, with the exception of:

• remaining at a similar level between tax years ending 2013 and 2016 (£7 billion)
• remaining at a similar level between tax years ending 2020 and 2021 (just under £4 billion) during the temporary WTC uplift as part of the response to the COVID-19 pandemic.

4.3 Total entitlement

As the majority (around three-quarters) of entitlement was CTC entitlement (Figure 5), the total annual entitlement chart follows a trend similar to CTC entitlement. Total entitlement started at £14 billion in tax year ending 2005. It increased until peaking around £29 billion in tax years ending 2012 and 2015, before falling until the end of the timeseries.

Figure 5: Total entitlement (billions £) of families receiving tax credits, from tax year ending 2005

Figure 6: Percentage of total entitlement by tax credit type of families receiving tax credits, from tax year ending 2005

WTC entitlement averaged one-quarter of total entitlement throughout tax credits. It peaked at the beginning of tax credits around 30% between tax years ending 2005 and 2011. The percentage of total entitlement belonging to WTC entitlement then fell from tax year ending 2011 onwards, except for a small increase during the temporary WTC uplift in tax year ending 2021.

5. Family size

5.1 Family composition

Most families claiming tax credits in tax year ending 2005 had children, with this category made up of:

• 3.4 million couples
• 1.4 million singles

Families without children made up only a very small proportion of families claiming tax credits in tax year ending 2005 (160,000 singles and 70,000 couples).

During the period to tax year ending 2011, which saw increasing numbers of families claiming tax credits:

• single families with children steadily rose to 2.2 million
• single families without children increased slightly
• couple families remained broadly unchanged

After a large fall in the number of couple families with children claiming tax credits to 1.9 million in tax year ending 2013, when the second income threshold for CTC was removed, singles with children became the largest group claiming tax credits.

From tax year ending 2013, the number of all family types receiving tax credits fell steadily.

Figure 7: Average family count (millions) receiving tax credits by family composition, from tax year ending 2005

5.2 Number of children

Families with children in tax year ending 2005 were made up of a:

• majority of one child (2.1 million) and 2 child (1.9 million) families
• minority of 3 child (575,000) and 4 or more children (187,000) families

The average number of children in families claiming tax credits increased between 2005 and 2011 with:

• a large increase in one child families (to 2.6 million)
• a smaller increase in 2 child families (to 2.1 million)
• only a very small increase in 3 and 4 or more child families

From tax year ending 2011 onwards, the average family size for families with children became smaller with:

• a large drop in one child families (to 1.8 million) and 2 child families (to 1.4 million) in tax year ending 2013 when the second income threshold for CTC was removed
• a steady decrease of both one and 2 child families from tax year ending 2013
• 3 and 4 or more child families remaining at similar levels during this period

In tax year ending 2021, 2 child families overtook one child families as the largest family size claiming tax credits following a slower rate of decrease compared with one child families.

Figure 8: Average family count (millions) receiving tax credits by number of children, from tax year ending 2005

6. Tax credits elements

6.1 In-work disabled and severely disabled child elements

This section refers to in-work families only.

Figure 9 shows that the number of in-work families claiming the disabled and severely disabled child elements increased between tax years ending 2013 and 2018, which contrasts against the downwards trend of the average family count during this period (Figure 1).

These figures were at their highest in tax year ending:

• 2018 for in-work families claiming the disabled child element (180,000)
• 2017 for in-work families claiming the severely disabled child element (70,000)

Figure 9: Average in-work family count receiving tax credits, split by receipt of disabled child and severely disabled child elements, from tax year ending 2005

7. Geography

The trends for total average family count were similar across all countries and English regions.

7.1 Regional family composition

There was slight regional variation in family composition trends, most strongly in London and Northern Ireland.

The greatest regional difference was seen in London, where:

• singles overtook couples as the largest family composition in tax year ending 2009, much earlier than the national average of tax year ending 2013
• couples remained stable between tax years ending 2013 and 2016 when couples in all other regions were decreasing

Single families in Northern Ireland continued to slightly increase past tax year ending 2011 until tax year ending 2015 when total families in all other regions were decreasing.

Figure 10: Average family count (thousands) receiving tax credits by family composition and region, from tax year ending 2005

7.2 Regional childcare element

Northern Ireland and London saw the greatest regional variation in the childcare element, each with 2 peaks (the second peak in tax years ending 2015 and 2018 for London and Northern Ireland respectively) instead of the single peak around tax year ending 2010 for all other regions.

Figure 11: Average family count (thousands) receiving the childcare element of tax credit by region, from tax year ending 2005

7.3 Regional disabled worker element

Between tax years ending 2009 and 2016, the regional trends for the number of families benefitting from the disabled worker diverged.

For most English regions and Northern Ireland, the number of families benefiting from the disabled worker element increased between tax years ending 2009 and 2016 and peaked in tax year ending 2016.

On the other hand, in Yorkshire and the Humber, the North East, North West, and Wales, tax year ending 2009 saw the highest number of families benefiting from the disabled worker element.

Figure 12: Average family count (thousands) receiving the disabled worker element of tax credit by region, from tax year ending 2005

8. A National Statistics publication

National Statistics are accredited official statistics. They are produced to high professional standards as set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

The United Kingdom Statistics Authority has accredited these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

Accreditation can be broadly interpreted to mean that the statistics:

• meet identified user needs
• are well explained and readily accessible
• are produced according to sound methods
• are managed impartially and objectively in the public interest
• are produced to the highest standard, ensuring that data confidentiality has been maintained

Once statistics have been accredited as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

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9. Contact details

9.1 Benefits and credits statistics

Media contact: HMRC Press Office

Statistical contact: J Martin