when did child tax credit start in uk
Child benefits in the United Kingdom The first modern child tax credit was introduced in the 1909 'People's Budget' of Lloyd-George. This introduced a £10 income tax allowance per child, for tax payers earning under £500 per annum. Following extensive Parliamentary debate, the Budget became law as the Finance Act (1909–1910) 1910 on 29 April 1910.[1] Since the income tax rate was then 1 shilling, two pence in the pound (5.83%), the value of the tax credit was therefore 11 shillings and eight pence per child. Since most people did not earn enough to pay tax, this was a subsidy for middle class parents. The nominal value of these tax credits were generally, though not always, increased in line with income tax rates. For instance, by 1916, income tax had increased to five shillings in the pound (25%), and the tax credit to £25, giving a value of the tax credit of £6 5 shillings.
Social Security number Before 1986, people often did not obtain a Social Security number until the age of about 14,[7] since the numbers were used for income tracking purposes, and those under that age seldom had substantial income.[8] The Tax Reform Act of 1986 required parents to list Social Security numbers for each dependent over the age of 5 for whom the parent wanted to claim a tax deduction.[9] Before this act, parents claiming tax deductions were simply trusted not to lie about the number of children they supported. During the first year of the Tax Reform Act, this anti-fraud change resulted in seven million fewer minor dependents being claimed. The disappearance of these dependents is believed to have involved either children who never existed or tax deductions improperly claimed by non-custodial parents.[10] In 1988, the threshold was lowered to 2 years old, and in 1990, the threshold was lowered yet again to 1 year old.[11] Today, an SSN is required regardless of the child's age to receive an exemption.[citation needed] Since then, parents have often applied for Social Security numbers for their children soon after birth; today, it can be done on the application for a birth certificate.[12]