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HMRC internal manual

Claimant Compliance Manual

Migrant workers: what income should be taken into account?

Tax Credit claims are initially based on the household income for the previous tax year. In the first year of residence /claiming in the UK the customer must declare the income they received tax year, ending 5 April, this is the same as anyone else claiming tax credits.

However tax years in other EEA countries end on 31 December (there are the odd exception for companies). The customer will not be able to take their income figure directly from their end of tax year certificate but should be advised to refer to their previous payslips which cover the period in question, 6 April to the following 5 April.

For initial claims the income of the previous UK tax year received in the customer’s home country should be calculated in the same way as you would for a UK citizen making a first claim.

If necessary the income should be converted into sterling at the average exchange rate for the period of 12 months, ending on 31 March in the year that the income arose. For further information on exchange rates refer to steps 9 and 10 in the guidance TCM0287210. For further information on treatment of foreign income refer to TCTM04002 and TCTM04003.

Note: Where there is a CTC claim and the partner and children are living in another EEA country the joint income of the household should be taken into account for CTC only. For the WTC claim only the income of the migrant worker in the UK is taken into account.