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HMRC internal manual

Tax Credits Manual

Eligibility - remunerative work (determining): Unpaid leave (Info)

Unpaid leave isn’t considered to be qualifying remunerative work. However, a person may still be entitled to apply for WTC provided that their unpaid leave is sufficiently short that it won’t disturb their normal working pattern.

Generally, if unpaid leave doesn’t last for more than four weeks, and the person returns to work after this, entitlement to WTC wouldn’t cease. However, if the person’s unpaid leave is part of a series of unpaid leave and there are other factors which reduce the working pattern, entitlement to WTC may stop.

If unpaid leave is likely to last for more than four weeks, a person’s entitlement will be affected from the first day of their leave.

If a person’s unpaid leave was due to last for less than four weeks and they later realise that the unpaid leave will last for more than four weeks, WTC will be affected from the first day they expect their leave to last more than four weeks.

Note: This also applies when periods of unpaid leave are taken immediately before or after periods of paid leave - for example, ordinary (paid) maternity or adoption leave, paternity leave or sick leave.