Answers · UK 2025/26
How does Working Tax Credit work for low-income earners in 2026/27?
Working Tax Credit (WTC) is a means-tested benefit for low-income workers. It tops up earnings for people working at least 16 hours/week (or 30 hours for higher rates) who earn below certain thresholds. However, most new claimants now claim Universal Credit instead -- WTC is only available if you are already receiving it or fall outside the UC system (notably some self-employed and mixed-age couples).
Full answer
Working Tax Credit (WTC) provides extra money to low-paid workers. It is administered by HMRC and paid directly into your bank account. However, it is important to note that most new claimants are now directed to Universal Credit (UC) instead -- WTC is largely being phased out. **Who still claims WTC?** - People who were already claiming WTC before Universal Credit was introduced in their area - Some mixed-age couples (one partner below, one above state pension age) not already on UC - Some self-employed people with specific circumstances - People who work at least 16 hours/week in certain categories **WTC elements (2026/27 approximate rates)** The basic award and various elements are uprated by CPI each April. The 2026/27 rates will be confirmed in Spring 2026. The 2025/26 confirmed annual rates were approximately: - Basic element: £2,435 - Couple element: £2,500 (if you and your partner both work) - 30 hours element: £1,015 (if you work 30+ hours) - Disability element: £3,935 - Working minimum: 16 hours/week for single parents and disabled workers; 24 hours/week for couples (one must work 16+) **How much do you receive?** WTC is reduced by a taper rate of 41% for every £1 your income exceeds the threshold (£7,955 in 2025/26). This means the benefit gradually decreases as earnings rise. **Worked example (approximate)** Single parent, 25 hours/week, income £14,000/year: - Basic WTC entitlement: £2,435 + £2,500 (single parent) = £4,935 - Income above threshold: £14,000 - £7,955 = £6,045 - Taper reduction: £6,045 x 41% = £2,478 - WTC received: £4,935 - £2,478 = £2,457/year = approximately £47/week **Universal Credit vs WTC** For most people, Universal Credit has replaced Working Tax Credit. UC pays a standard allowance plus additional elements, with a taper rate of 55% (earnings reduce the UC award by 55p for every £1 earned above a work allowance). If you are making a new claim for support, you will almost certainly be directed to UC. **Childcare through WTC** If you are still on WTC with children, you may claim the childcare element covering up to 70% of registered childcare costs.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.