Confused by tax credits

Batman_100 · 4 October 2016 at 5:54PM

Hi

I started a new job 5 weeks ago and got my first tax credits payment today. It was vastly over what I was expecting, so I've just been on the phone to the tax credits helpline and I was amazed by what the guy in the call centre told me.

Basically, I earn £225 per week before tax (£7.50ph x 30hr per week), I'm single, have no children and am not disabled. Before I submitted my claim I entered my details in to an online benefits calculator and was told I'd be eligible for £11.39 a week in working tax credits.

But instead of receiving £56.95 for my first 5 weeks payments I received £161.64. I called the HMRC helpline and the guy on the phone said this is right because the online calculator assumes I'd be claiming for the whole of the 2016/17 tax year and not just part of it. He said my award is for the total year and will be paid over the remainder of it in weekly installments.

This took me by surprise as I couldn't understand why the government would be paying me tax credits for a period of time (April 6th until when I started my current job) when I wasn't eligible for them. For part of that time I was working in a higher paid job and part of that time I was claiming JSA.

I've never claimed tax credits before and I'm not 100% sure how this very confusing system works. I don't want to end up in a situation where I get a demand for repayments at the end of that tax year.

I was wondering if anyone could make sure I've got this right and put my mind at rest.

Thanks.

Darksparkle · 4 October 2016 at 7:16PM

After meeting the initial criteria, age/hours etc, tax credits are based on how much you earn in the tax year.

The claim form asks why your income was for the tax year 2015/16, have you now provided them with an update on how much you expect to earn in this tax year, 2016/17?

Batman_100 · 4 October 2016 at 8:17PM

I have them all the information they asked for regarding my income for the 2015/16 tax year and my hours and earnings for my current job so as to work out my earnings for this tax year. I filled in the forms as honestly as I could.

Darksparkle · 4 October 2016 at 8:18PM

The forms do not ask you for your earnings for this tax year. You need to call and tell them this.

densol_2 · 4 October 2016 at 8:39PM

I believe you may have just told them your earnings in the current job from Oct to April but not added on the higher paid job, April to ? Plus the JSA from ? to ? ...... Which all added together are your total income for this current tax year. As DS says, you tell them total income for LAST tax year then call them to update income ( TOTAL ) for this tax year. TC dont just work on the earnings in the period of the claim- its the total income for the whole tax year.

Batman_100 · 4 October 2016 at 9:05PM

densol wrote: »

I believe you may have just told them your earnings in the current job from Oct to April but not added on the higher paid job, April to ? Plus the JSA from ? to ? ...... Which all added together are your total income for this current tax year. As DS says, you tell them total income for LAST tax year then call them to update income ( TOTAL ) for this tax year. TC dont just work on the earnings in the period of the claim- its the total income for the whole tax year.

I don't remember them asking for that on the claims form. All I remember them asking for was my total earnings for last tax year and my earnings from my current employment.

Surely they can't just assume I've been in my current job since the beginning of the current tax year? I explicitly stated on the form that I started my current job on August 30th.

NYM · 4 October 2016 at 9:12PM

So you gave them total earnings for the tax year 15/16 and then the anticipated earnings from your current job? How do they know what you've earned so far this year?

Batman_100 · 4 October 2016 at 9:30PM

NYM wrote: »

So you gave them total earnings for the tax year 15/16 and then the anticipated earnings from your current job? How do they know what you've earned so far this year?

Might it be advisable to call them again to check on this?

I filled in the forms the best I could so I can't see where a problem would arise.

NYM · 4 October 2016 at 9:34PM

Batman_100 wrote: »

Might it be advisable to call them again to check on this?

I filled in the forms the best I could so I can't see where a problem would arise.

Yes I think it would be advisable.

You can provide them the figures they need to assess you correctly.

Batman_100 · 4 October 2016 at 9:39PM

Also, I've just had a look at my P45's from my previous employer and the job centre and my total earnings for this tax year up until I started my current job is roughly £1,000 less than if I'd been in my current job during that period. So surely that means that my tax credits would be lower than the figure given by the online calculator, not higher.

This is all very confusing.

Batman_100 · 4 October 2016 at 9:40PM

NYM wrote: »

Yes I think it would be advisable.

You can provide them the figures they need to assess you correctly.

Thank you. This wouldn't trigger a fraud investigation or anything like that would it?

Confused by tax credits

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