Your Child can be a money saving instrument. No Jokes. Actually 40% people living in UK are totally unaware of child tax credits benefits. They don’t even know that their child can be identified as a rebate. Sad but true.

Child Tax Credit is for people who are responsible for at least one child or qualifying young person. Child Tax Credit is paid direct to the person who is mainly responsible for caring for the child or children. If you are a lone parent you will receive the payment. Child Tax Credit can be paid to workers who continue to pay UK National Insurance Contributions when posted from the UK to work in another country in the European Economic Area.

Each child is a worth an extra £1,900 when it comes to your inland revenue taxes. Childrens’ savings are NOT automatically tax free. They’re taxed as similar to adults and has an annual personal allowance £6,035) the amount earnable from salary, savings or investment income before it’s taxed.

Your child can earn £100 income before the Inland Revenue would attack a tax to it. If a child generates more than £100 interest in the course of the year from money specifically given by each parent, this income is taxed at that parents’ tax rate. That means you can put upto £1,850 in the 3.25% children’s account, and it wouldn’t be taxed, as that would generate around £90. Please note it’s the interest generated from all cash given in this and previous years.

In short, the following Child Tax Credits Benefits may be available for you if you satisify any of the following conditions:

1) You have dependent children and a family income less than £58,000, or £66,350 if you have a baby under a disabled child or a large family and you spend a lot on childcare .
2) You have children and earning less than £16,000 per year.

How much Child Benefit will you get?

There are two separate amounts, with a higher amount for your eldest (or only) child. You get £18.80 a week for your oldest child (going up to £20.00 a week from 5 January 2009) and £12.55 a week (going up to £13.20 a week from 5 January 2009) for each of your other children.

How is Child Benefit paid?

Child Benefit can be paid into any bank, building society, or National Savings & Investments (NS&I) account that accepts Direct Payment. It’s usually paid every four weeks, but it can be paid weekly if you’re getting Income Support, Income-based Jobseeker’s Allowance, income related Employment and Support Allowance or if you’re a single parent.

Additional note for expectant mothers, From April 2009, you can claim a one-off, tax-free payment from H M Revenue & Customs (HMRC) if you’re a mum-to-be who’s at least 25 weeks pregnant. The payment is called ‘Health in Pregnancy Grant’ and is to help you prepare for the birth of your baby.

Hope this Child Tax Credits Guide will help you with your 2009 Tax Filing.