Work credits are classified into two types: career tax credits (WTC) and child tax credits (CTC). The tax benefit system would be phased down in favour of universal credit in the long run (UC).
Universal credit is now mandatory in the United Kingdom. Still, specific households may no longer be able to apply for tax credits and now be allowed to assert UC (or pension credit). Around November 2020 and September 2024, existing tax credit applications will be moved to UC.
Apprenticeships and tax benefits may be complex to understand. Some people can claim universal credit on an apprenticeship. To be considered for WTC, you must fulfil the following conditions if you are single and do not have children:
- at least 25 years old and working at least 30 hours a week in “remunerative” jobs
- or at least 16 years old and working at least 16 hours per week regardless of whether you have a physical or mental disability that renders finding work difficult
- or at least 60 years old and working at least 16 hours per week
Work hours can vary whether you have children or are a part of a pair.
According to HMRC, the hours you spend as an apprentice count as “remunerative” work for WTC purposes if you do the following:
- You have an apprenticeship job contract.
- You are engaged in a scheme (apprenticeship) where the salary is taxable and subject to payroll tax and National Insurance payments.
When it comes to universal credit and apprenticeships, you will receive universal credit if you do a “recognised” apprenticeship. This means, according to the DWP’s rules, you must:
- working for a recognised qualification with a reputable firm and receiving at least the national living wage for an apprentice
In addition, you must be able to provide the following:
- the name of your educational company
- the title of the vocational degree you are studying
There are no upper or lower limits to the number of hours you must participate in qualifying for universal credit as an apprentice; nevertheless, you would be expected to do “job-related duties” as part of your Claimant Commitment if your earnings do not meet a certain level, known as your Conditionality Earnings Threshold (CET) allowing you to claim universal credit on an apprenticeship
As an apprentice, you are limited to working no more than 30 hours a week compounded by the applicable minimum wage scale. If you are ill, this number can be diminished, or you may be exempt from CET entirely. You can discuss this with your job coach and decide about it as part of your universal credit Claimant Commitment.