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Children's Handbook Scotland | 2023/24

4. Tax credits

• The amount of tax credits

Child tax credit (CTC) remains payable for a child, provided s/he is treated as ‘normally living with’ you.1Reg 3 CTC Regs HM Revenue and Customs (HMRC) guidance says this means that the child ‘regularly, usually, typically’ lives with you and that this allows for temporary or occasional absences.2para 02202 TCTM

In addition, the tax credit rules allow your child to be treated as ‘normally living with you’ while s/he is in residential accommodation, provided:3Reg 3 r4.2 CTC Regs

•s/he is there solely because of her/his disability, or on the grounds that her/his health would be significantly impaired or further impaired were s/he not in that accommodation; and
•you were treated as responsible for her/him for tax credit purposes before s/he went into that accommodation.

This means you should keep receiving CTC for your child even though s/he is away at school. Your child also continues to count as a dependent child for working tax credit (WTC) purposes.

 

1     Reg 3 CTC Regs »

2     para 02202 TCTM »

3     Reg 3 r4.2 CTC Regs »

The amount of tax credits

If your child’s disability living allowance (DLA) or child disability payment (CDP) care component or personal independence payment (PIP) or adult disability payment (ADP) daily living component has stopped (see here), this affects the disability and severe disability elements as follows.1Reg 8 CTC Regs

•The disabled child element stops being included in your CTC calculation from the date the DLA or CDP care component/PIP or ADP daily living component stops (see here), unless there is another basis for getting it – ie, your child is still getting DLA, CDP, PIP or ADP mobility component or is severely sight impaired or blind.
•The severely disabled child element stops being included in your CTC calculation from the date the DLA or CDP care component/PIP or ADP daily living component stops (see here).

If your child’s DLA or CDP care component/PIP or ADP daily living component starts being paid again (eg, because s/he comes home for a weekend or a holiday – see here), the disabled child element/severely disabled element should be included in your CTC for the days DLA/CDP/PIP/ADP is paid.

If you are getting help with childcare costs in your WTC, this may change when your child is away at school. If your childcare costs stop or reduce by £10 or more over a period of four weeks, you must let HMRC know.

Make sure you report changes to HMRC to avoid underpayments and overpayments.

 

1     Reg 8 CTC Regs »