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HMRC internal manual

Tax Credits Technical Manual

Calculation of awards: Step 3- Determining whether income needs to be taken into account and applying income tapers

Determining whether income adjustments are due

Section 7(2) Tax Credits Act 2002

The Tax Credit (Income Thresholds and Determination of Rates) Regulations 2002, Regs 4 and 6(b)

If the claimant is entitled to certain social security benefits during the tax credits award period,

  • no income will be taken into account whilst they remain in receipt of those benefits and,
  • the person will receive the full amount of tax credits appropriate to their circumstances

The social security benefits are:

  • Income Support (but see the exception below)
  • Jobseekers Allowance (Income Based)
  • State Pension Credit
  • Income related employment and support allowance

Entitlement to Income Support that is only provided under regulation 6(2) and (3) of the Income Support (General) Regulations 1987 is excluded.

This does not apply to WTC during the four week “run on” period described in TCTM02450 (ceasing to undertake work or working for less than 16 or 30 hours per week).