Working Tax Credits

Some employees may qualify for Working Tax Credits, which must be paid to them through the PAYE system.

If they qualify, Her Majesty's Revenue & Customs (HMRC) will send you a start notice, and you should then adjust the employee's pay accordingly. Working Tax Credits are paid by reducing the deductions normally made from the employee's earnings by the appropriate amount. If the deductions are not sufficient to cover the credit amount, you must ask HMRC to pay the difference. You must continue paying credits until HMRC sends you a stop notice.

Further Reading

• Calculating PAYE
• Employees on the payroll
• Paying the Inland Revenue
• PAYE Forms
• Payslips
• Statutory pay
• Working Tax credits
• Student loans