what are my employer's responsibilities for Working Tax Credit?

Employers have to be ready to pay Working Tax Credit with wages. When a worker claims WTC the Inland Revenue pays it direct to her/him for the first 42 days. The Inland Revenue gives the employer 42 days' notice of when payments are due to start and how much to pay. After that the employer has to pay the worker the right amount of WTC, together with her/his wages. Inland Revenue also tells the employer if the amount of WTC to be paid is to change, or if the payments should stop.

Employers should pay for the WTC from the deductions they normally pay to the Inland Revenue, such as PAYE, National Insurance Contributions and Student Loan deductions.

If these deductions will not cover the Working Tax Credit that has to be paid, employers can apply to the Inland Revenue for advance funding to make up the shortfall. The money is paid direct into the business's account, normally by the 6th of each month, but special arrangements can be made if the employer needs it before then.

Employers have to keep records of the WTC payments they have made for three years, and they must list them as a separate item on employees' pay slips and P60s.

These arrangements are designed to treat employers fairly. The 42 days' notice is plenty of time in which to make payroll arrangements and decide whether the Working Tax Credit can be funded from other deductions. The paperwork is not an excessive burden, and there is an employer Helpline to provide assistance with any problems: 0845 7 143 143 (0845 602 1380 for employers with hearing or speech impairments who use textphones)