Tax Credits: How do tax credits work?

The tax credits system ended on 5 April 2025. This section of the site remains in place for ongoing tax credit issues such as tax credit debts, disputes, appeals, complaints and compliance checks.

In this section we have kept information that advisers may need to deal with tax credit issues from 6 April 2025. Our previous guidance pages, for example those explaining how tax credits worked and were paid, have been moved to our archive section.