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HMRC internal manual

Tax Credits Manual

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HM Revenue & Customs
Updated
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Eligibility - residency and immigration: Residence, presence and right to reside - right to reside (Info)

Working Tax Credit (WTC) is available to customers from states in the European Economic Area (EEA) who are exercising their rights as workers in the United Kingdom (UK), or their right to reside here, under Community Law. Such customers are therefore to be treated as ordinarily resident for the purposes of WTC.

For new claims made on or after 01-05-2004 and during the initial period of derogation from the Treaty of Accession (which is an option not to adopt all of the provisions up to 30-04-2006), entitlement to Child Tax Credit (CTC) will depend on the customer, regardless of nationality, having a ‘right to reside’ in the UK (whether under UK or EC law). This is in addition to the customer having to meet the existing tests of being present and ordinarily resident in the UK.

A customer can be treated as having a right to reside in the UK if they are a

  • UK national or national from the Common Travel Area by virtue of the Immigration Act 1971 (which covers the UK, the Republic of Ireland, the Channel Islands and the Isle of Man)
  • worker or work-seeker from an EEA state
  • third country national legally resident in another EEA member state and moving to the UK.

A customer will not be treated as having a right to reside in the UK if they are an EEA national (except UK or Irish nationals, but including nationals of Cyprus and Malta) who is economically inactive.

In these cases, the customer would only have the right to reside in the UK if they have sufficient resources to avoid becoming an unreasonable burden on the social assistance system of the UK and have Comprehensive Sickness Insurance (CSI) in the UK for themselves and their family members.

Note: To see what documents are acceptable as evidence of CSI see glossary, extra information, Comprehensive Sickness Insurance (CSI) TCM0320080.

All the customer’s personal circumstances would be taken into account when deciding whether they are self-sufficient. Such factors could include the likelihood of the customer obtaining employment and whether or not they had claimed means tested Social Security benefits from the Department for Work and Pensions or Department for Social Development. For example, Income Support, income-based Jobseeker’s Allowance, Housing Benefit, Council Tax Benefit or Council Tax Reduction Scheme.

From 01-05-2004 Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia became members of the EU. From 01-01-2007 Bulgaria and Romania became members of the EU. From 01-07-2013 Croatia also became a member of the EU.

Note: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary and Slovenia are commonly referred to as the A8 member states. This is because up to 30-04-2011, unless exempt from registration, nationals from these member states were required to register their employment with the Home Office Worker Registration Scheme (WRS). This scheme came to an end on 30-04-2011 and from 01-05-2011 nationals from the A8 member states working in the UK are no longer required to register their employment with the Home Office. From 01-05-2011 customers arriving from these member states are treated in the same way as nationals from any other EEA member state.

Note: Bulgaria and Romania are commonly referred to as the A2 member states. Until 31 December 2013, unless exempt from registration, nationals from these member states are required to register their employment in the UK with the Home Office Worker Authorisation Scheme (WAS). This scheme comes to an end on 31 December 2013. From 1 January 2014 nationals from A2 member states working in the UK are no longer required to register their employment with the Home Office. From 1 January 2014 customers arriving from these member states are treated in the same way as nationals from any other EEA member state.

Note: Croatia is part of the EEA, but follows different guidelines under tax credits regulations.