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  • FIRST POST
    echoes008
    tax credit - change when on JSA? how often does it change in 1 year
    • #1
    • 28th Nov 10, 11:16 PM
    tax credit - change when on JSA? how often does it change in 1 year 28th Nov 10 at 11:16 PM
    Hi,

    I have been trying to work out how much working tax credit my partner and I would get using HMRC and turn2 website.

    Forms ask for apr 2009 to apr 2010 tax year income. Once it takes that into consideration it gives me figure of about 193 for next 5 months. (which equates to about 545 for 1 year)

    It doesn't take into consideration that once I am made redundant, our household income will be almost 1/3rd of what we had for apr 2009-apr 2010 tax year.

    2nd time when I filled in the form I selected the option for contribution based JSA, when I did that I wasn't asked for our anual salary for 09-10 tax year...and... it also gave me very generous tax credit estimate of about 2300 for next 5 months. (about 5200 for full year.

    I just can't work out.. Whats going on here.

    I will be made redundant in about months time. So presumably when it comes to tax credit calculation next time, my apr-2010 to apr-2011 income will be taken into consideration. Which means - proportional to my annual salary, I would have earned about 20k for first 8 or 9 months of this financial year. Taking that into account, next year again, we would only get about 500 for full year as a tax credit .

    Do I need to inform them when my job goes..would that make any diff. with regards to how much tax credit we get?
    This seems like a crackpot system. How does one survive on 65 a week JSA.. Shouldn't they provide this tax credit as and when the drop in income happens or when its most needed?
    Last edited by echoes008; 28-11-2010 at 11:20 PM.
Page 1
  • echoes008
    • #2
    • 29th Nov 10, 12:09 AM
    • #2
    • 29th Nov 10, 12:09 AM
    Hi,

    I have been trying to work out how much working tax credit my partner and I would get using HMRC and turn2 website.

    Forms ask for apr 2009 to apr 2010 tax year income. Once it takes that into consideration it gives me figure of about 193 for next 5 months. (which equates to about 545 for 1 year)

    It doesn't take into consideration that once I am made redundant, our household income will be almost 1/3rd of what we had for apr 2009-apr 2010 tax year.

    2nd time when I filled in the form I selected the option for contribution based JSA, when I did that I wasn't asked for our anual salary for 09-10 tax year...and... it also gave me very generous tax credit estimate of about 2300 for next 5 months. (about 5200 for full year.

    I just can't work out.. Whats going on here.

    I will be made redundant in about months time. So presumably when it comes to tax credit calculation next time, my apr-2010 to apr-2011 income will be taken into consideration. Which means - proportional to my annual salary, I would have earned about 20k for first 8 or 9 months of this financial year. Taking that into account, next year again, we would only get about 500 for full year as a tax credit .

    Do I need to inform them when my job goes..would that make any diff. with regards to how much tax credit we get?
    This seems like a crackpot system. How does one survive on 65 a week JSA.. Shouldn't they provide this tax credit as and when the drop in income happens or when its most needed?
    Originally posted by echoes008
    Also based on the information above.. hypothetically speaking... if I don't have a job next financial year - (apr 2011 to apr 2012) and disregarding other factors our household income for 2011-2012 financial year will be only 9k or so.. Does that mean that we would get almost maximum tax credit for 1 year starting from apr 2012? This again seems quite silly as I might have a job paying me 35k per year in May or June 2012 and I would be getting almost maximum tax credit (working + child) as it would be based on my previous years (non-existant) income....
    Last edited by echoes008; 29-11-2010 at 12:11 AM.
  • Caz3121
    • #3
    • 29th Nov 10, 8:49 AM
    • #3
    • 29th Nov 10, 8:49 AM
    I will be made redundant in about months time. So presumably when it comes to tax credit calculation next time, my apr-2010 to apr-2011 income will be taken into consideration. Which means - proportional to my annual salary, I would have earned about 20k for first 8 or 9 months of this financial year. Taking that into account, next year again, we would only get about 500 for full year as a tax credit .
    Originally posted by echoes008
    Tax credits work on a tax years income can work in two ways - the default is to use the previous years income. The alternative is to use the current years income but you lose the benefit of the 25k disregard.
    If you are still not working on renewal next year you will be able to inform them of your current income and have it worked out on that but any you earn over that estimate will result in an overpayment and will need to be payed back
  • echoes008
    • #4
    • 29th Nov 10, 9:13 AM
    • #4
    • 29th Nov 10, 9:13 AM
    Tax credits work on a tax years income can work in two ways - the default is to use the previous years income. The alternative is to use the current years income but you lose the benefit of the 25k disregard.
    If you are still not working on renewal next year you will be able to inform them of your current income and have it worked out on that but any you earn over that estimate will result in an overpayment and will need to be payed back
    Originally posted by Caz3121
    Thanks. Who decides which option to choose.. Tax office choose it or we get to choose it.. Either way I don't suppose they would let us win..

    In my case if we ask them to use the current years income, we may get lost more money in terms of tax credit. But are you saying that when I get another job that pays in excess off 25k. our tax credit will go down to minimum again.

    so if I don't have a job between apr 2011 and apr 2012, we may get 4500 in tax credit but from apr 2012 it would go down proportional to my income at that point. Would they then ask me to pay back previous years generous allowance?
  • lah
    • #5
    • 11th Dec 10, 3:46 PM
    • #5
    • 11th Dec 10, 3:46 PM
    Hi Just a word of warning when you apply for tax credits make sure you tell them what sort of JSA you are on,my partner didn't know there are two different ones he was receiving contribution J S A and because of this we wasn't entitled to anything but because we didn't know there was two different ones we was overpaid by 3600 and know we are trying to fight it because they said we should have known that he was receiving contribution based JSA not just JSA , we didn't know there was two different allowances because my partner has always worked for 28 yrs and never been out of work and the system was all new to us,but they are saying it wasn't up to them to tell us we should have known so be careful.
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