Tax credits once formed the backbone of the UK’s in-work benefits system. For years, they helped millions of people top up low wages, support families, and stay in employment. Then the system began to change — quietly, gradually, and often confusingly.
If you’re searching for tax credit and working tax credit, you’re not alone. Many people are unsure whether tax credits still exist, whether Working Tax Credit is different, or what applies now that Universal Credit has taken over. Some pages say tax credits have ended. Others suggest people are still being paid. A few imply you can still apply.
The confusion isn’t your fault.
As of 2026, tax credits are closed to new claims, but they haven’t disappeared overnight. Some people are still receiving payments, others are being moved across to Universal Credit, and a single wrong step can permanently change what you receive.
This guide explains everything clearly, in plain English. You’ll learn:
- The difference between tax credits and Working Tax Credit
- What ended, what still exists, and what replaced them
- How Universal Credit fits into the picture
- What can trigger a move onto Universal Credit
- What to do — and what to avoid — in 2026
If you want clarity rather than policy jargon, you’re in the right place.
Are Tax Credits and Working Tax Credit the Same?
No — but they are closely linked.
What “Tax Credits” Means
Tax credits were the umbrella term for two benefits:
- Working Tax Credit (WTC) – for people in paid work on a low income
- Child Tax Credit (CTC) – for families with children
When people talked about “tax credits,” they were usually referring to one or both of these together.
What is Working Tax Credit Was
Working Tax Credit specifically supported people who were:
- In paid work (including self-employment)
- On a low income
- Working a minimum number of hours
- Sometimes living with a disability or long-term health condition
The amount you received depended on income, hours worked, disability elements, and household circumstances.
Have Tax Credits and Working Tax Credit Ended?
The Key Date
New claims for tax credits ended on 5 April 2025.
This means:
- ❌ You cannot apply for Working Tax Credit anymore
- ❌ You cannot start a new tax credit claim
- ✅ Some people still receive tax credit payments
- ✅ Migration to Universal Credit is still ongoing in 2026
Important Clarification
If you are already receiving Working Tax Credit or Child Tax Credit, your payments do not automatically stop just because new claims are closed. Many claimants remain on tax credits until they are formally moved to Universal Credit or experience a change that requires a new claim.
Tax Credit vs Working Tax Credit vs Universal Credit
| Feature | Tax Credits | Working Tax Credit | Universal Credit |
|---|---|---|---|
| Status in 2026 | Closed to new claims | Closed to new claims | Open |
| Replaced by UC | Yes | Yes | N/A |
| Paid monthly | No | No | Yes |
| Based on work hours | Yes | Yes | No |
| Includes housing support | No | No | Yes |
| Managed by | HMRC | HMRC | DWP |
Key point: Universal Credit combines several benefits into one monthly payment, including the support that Working Tax Credit used to provide.
Can You Claim Working Tax Credit and Universal Credit Together?
No. You cannot receive tax credits and Universal Credit at the same time.
Once you make a Universal Credit claim:
- Your tax credits stop permanently
- You cannot return to them later
This is why claiming Universal Credit “just to check” can be a costly mistake.
Also Read: What to Prepare for Your 2026 Tax Filing: A Complete Checklist
What Can Trigger a Move from Tax Credits to Universal Credit?
Some changes in circumstances can force a move onto Universal Credit. These include:
- Claiming Universal Credit for any reason
- Moving home, especially if it requires a new claim for housing support, which is now Universal Credit only
- A change in household (partner moving in or out)
- Significant changes that end tax credit entitlement or require a new benefit claim
Not every change forces migration, but once Universal Credit is claimed, tax credits end for good.
Real-World Example (2026)
Sarah, aged 42:
- Works 24 hours a week
- Has received Working Tax Credit since 2018
- Has no children
- Experiences a rent increase in 2026
Sarah applies for Universal Credit to help with housing costs.
What happens next:
Her Working Tax Credit stops immediately. She moves fully onto Universal Credit and cannot return to tax credits — even if her Universal Credit payment is lower at first.
This scenario is common and often unexpected.
Common Mistakes to Avoid
- Claiming Universal Credit without checking the consequences
- Assuming Working Tax Credit continues automatically forever
- Reporting changes incorrectly or late
- Using outdated benefit calculators
- Confusing Child Tax Credit with Working Tax Credit
Small misunderstandings can lead to permanent changes in entitlement.
What Should You Do in 2026? (Quick Checklist)
✔ Check whether you are still receiving tax credits
✔ Read any migration letters from HMRC carefully
✔ Get advice before claiming Universal Credit
✔ Use an up-to-date benefits calculator
✔ Keep records of income, hours worked, and savings
Tax Credits Have Ended — What Replaced Them?
Universal Credit now replaces:
- Working Tax Credit
- Child Tax Credit
- Housing Benefit
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
Universal Credit works differently:
- Paid monthly, in arrears
- Managed online
- Income reported in real time
Many people experience a five-week wait before their first payment, although advances are available.
Transitional Protection Rules Many Claimants Miss (2026)
The One-Month Grace Period
If you receive a managed migration notice telling you to move from tax credits to Universal Credit, you are usually given three months to claim.
If you miss that deadline, there is often a one-month grace period where you can still claim Universal Credit and keep your Transitional Protection, provided you act quickly.
After that grace period:
- Transitional Protection is normally lost
- Your Universal Credit payment may be lower
This detail is frequently overlooked and can have a serious financial impact.
Also Read: Deadline for Income Tax Return 2025–2026: UK Filing Guide
Savings Over £16,000 — An Important Exception
Normally, having £16,000 or more in savings means you cannot receive Universal Credit.
However, under managed migration rules:
- Some tax credit claimants with savings over £16,000
- Can still receive Universal Credit
- For up to 12 months
- If they move only after receiving a migration notice
If you claim Universal Credit early without being prompted, this protection usually does not apply.
FAQs
Q. Are tax credits the same as Working Tax Credit?
No. Working Tax Credit was one type of tax credit. The other was the Child Tax Credit, which supported families with children. Both have now been replaced by Universal Credit for new claims.
Q. Can I still receive Working Tax Credit in 2026?
Yes, in some cases. You can still receive Working Tax Credit in 2026 if you claimed before April 2025 and have not moved to Universal Credit. Existing claims continue until you are migrated or a change ends your entitlement.
Q. Can I claim Working Tax Credit and Universal Credit at the same time?
No. You cannot receive Working Tax Credit and Universal Credit together. Once you make a Universal Credit claim, your tax credits stop permanently and cannot be restarted.
Q. What replaces Working Tax Credit now?
Universal Credit replaces Working Tax Credit. It also replaces several other legacy benefits, including Child Tax Credit and Housing Benefit, combining them into a single monthly payment.
Q. Can I lose Transitional Protection when moving to Universal Credit?
Yes. Transitional Protection can be lost if you:
- Claim Universal Credit before receiving a migration notice
- Miss your migration deadline without using the grace period
- Experience certain changes in circumstances after moving
Once lost, Transitional Protection usually cannot be restored.
Q. What happens if I miss my Universal Credit migration deadline?
You usually have a one-month grace period. If you claim Universal Credit within this grace period, you can normally keep your Transitional Protection. After that, the protection is usually lost and your payment may be lower.
Conclusion
Understanding tax credit and working tax credit in 2026 is less about old rules and more about knowing where you stand right now. New claims have ended, but existing payments haven’t vanished overnight. Universal Credit has replaced tax credits, and once you move, there is no way back.
The biggest risk isn’t missing out on support — it’s making an irreversible decision without realising it.
If you’re still on tax credits, protect your position. If you’re considering Universal Credit, check first. A few minutes of advice can prevent years of reduced income.
Related: Tax Consolidation Act 1997 Explained: 2026 Guide for Ireland
