TCTM07APPX1 - Calculation of entitlement: The rates and how to use them
Appendix 1 - The rates and how to use them
Note: At points in the calculation when the legislation does not require the numbers to be rounded the calculations display numbers only to 3 decimal places (dp). This is for presentational ease and does not affect the remainder of the calculation. As a result there may be occasion when your own calculation may vary slightly to the award, however this will be rare and due only to the rounding applied by the computer system. For most cases the 3 figure (dp) number will be used in the rounding but occasionally the last figure displayed will show a zero, for example 1.120. An assumption is therefore made that there are further numbers after the 0, (eg.1.1201) which when rounding up will result in 1.13. In these cases only, the rounding is shown as 1.120 = 1.13.
Working Tax Credit
The Working Tax Credits (Entitlement and Maximum Rate) Regulations 2002, Schedule 2
WTC includes two entitlements:
- Work elements
- Child care elements
| WTC Work Elements | 2010/2011 rates | 2011/2012 rates | Calculation TY 2010/2011 | Maximum daily rate |
| Basic element | £1,920 | £1,920 | £1,920 / 366 = £5.245 rounded up = | £5.25 |
| Second adult element | £1,890 | £1,950 | £1,950/ 366 = £5.327 rounded up = | £5.33 |
| Lone parent element | £1,890 | £1,950 | £1,950 / 366 = £5.327 rounded up = | £5.33 |
| Disability element | £2,570 | £2,650 | £2,650 / 366 = £7.240 rounded up = | £7.25 |
| Severe disability element | £1,095 | £1,130 | £1,130 / 366 = £3.087 rounded up = | £3.09 |
| 30 hour element | £790 | £790 | £790 / 366 = £2.158 rounded up = | £2.16 |
| 50 plus element (16-29 hours) | £1,320 | £1,365 | £1,365 / 366 = £3.729 rounded up = | £3.73 |
| 50 plus (30+ hours) | £1,965 | £2,030 | £2,030 / 366 = £5.546 rounded up = | £5.55 |
WTC Childcare Element
The Working Tax Credits (Entitlement and Maximum Rate) Regulations 2002, Regs 20(2) and (3)
The WTC childcare element is worth up to 70% of allowable childcare costs (up to a limit). Maximum eligible costs are £175 per week where there is 1 child in relevant childcare and £300 where 2 or more children are in relevant childcare.
| Max childcare costs | 2010/11 rates | 2011/12 rates | Calculation TY 2011/2012 | Maximum daily rate |
| 1 child | £175.00 | £175.00 | £175.00 / 7 = £25.00 round up = | £25.00 |
| 2 or more children | £300.00 | £300.00 | £300.00 / 7 = £42.857 round up = | £42.86 |
Child Tax Credit
CTC includes two entitlements:
- “Individual Elements” and
- “Family Element”
The CTC Individual Elements includes the following elements:
| Elements | 2010/2011 rates | 2011/2012 rates | Calculation TY 2011/2012 | Daily rate |
| Child Element | £2,300 | £2,555 | £2,555 / 366 = £6.980 rounded up = | £6.99 |
| Young person element | £2,300 | £2,555 | £2,555 / 366 = £6.980 rounded up = | £6.99 |
| Disability element (includes child element) | £5,015 | £5,355 | £5,355 / 366 = £14.631 rounded up = | £14.64 |
| Severe disability element (includes child element) | £6,110 | £6,485 | £6,485 / 366 = £17.718 rounded up = | £17.72 |
The CTC Family Elements includes the following elements:
| Elements | 2010/2011 rates | 2011/2012 rates | Calculation TY 2011/2012* | Daily rate |
| Family element | £545 | £545 | £545 / 366 = £1.489 rounded up = | £1.49 |
| Family & Baby element | £1,090 | Nil* | *The baby element of CTC was removed from April 2011 | £0.00 |
Income Thresholds TY 2011/2012
| Thresholds | 2010/2011 rates | 2011/2012 rates | Calculation TY 2011/2012 | |
| WTC threshold | £6,420 | £6,420 | £6,420 / 366 = | £17.54 |
| WTC withdrawal rate | 39% | 41% | ||
| CTC only threshold | £16,190 | £15,860 | £15,860 / 366 = | £43.33 |
| CTC 2nd threshold | £50,000 | £40,000 | £40,000 / 366 = | £109.28 |
| CTC family element withdrawal rate | 6.67% | 41% | ||
| Income increase disregard | £25,000 | £10,000 |
