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27 March, 2020 Open access

Increase of basic allowance of working tax credit for 2020/2021 in response to coronavirus

Coronavirus Act 2020 increases allowance from £1,995 to £3,040

The Coronavirus Act 2020 has increased the basic allowance of working tax credit for 2020/2021 to £3,040.

Further to the Chancellor's announcement last week of a new workers' support package - that includes a series of benefit changes for people affected by COVID-19 - section 77 of the Act legislates to increase the working tax credit basic allowance from £1,995 to £3,040 for 2020/2021 by amending the figures in the table in Schedule 2 of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (SI.No.2005/2002) (maximum rates of the elements of a working tax credit).

In addition, the Act includes provision to prevent the increased amount from applying for the purposes of any annual review of tax credit rates by the Treasury in accordance with section 41 of the Tax Credits Act 2002.

Section 77 of the Coronavirus Act 2020 is available from legislation.org.uk