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    • Batman 100
    • By Batman 100 4th Oct 16, 5:54 PM
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    Batman 100
    Confused by tax credits
    • #1
    • 4th Oct 16, 5:54 PM
    Confused by tax credits 4th Oct 16 at 5:54 PM
    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.
Page 1
    • Darksparkle
    • By Darksparkle 4th Oct 16, 7:16 PM
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    Darksparkle
    • #2
    • 4th Oct 16, 7:16 PM
    • #2
    • 4th Oct 16, 7:16 PM
    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
    • By Batman 100 4th Oct 16, 8:17 PM
    • 163 Posts
    • 55 Thanks
    Batman 100
    • #3
    • 4th Oct 16, 8:17 PM
    • #3
    • 4th Oct 16, 8:17 PM
    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
    • By Darksparkle 4th Oct 16, 8:18 PM
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    Darksparkle
    • #4
    • 4th Oct 16, 8:18 PM
    • #4
    • 4th Oct 16, 8:18 PM
    The forms do not ask you for your earnings for this tax year. You need to call and tell them this.
    • densol
    • By densol 4th Oct 16, 8:39 PM
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    densol
    • #5
    • 4th Oct 16, 8:39 PM
    • #5
    • 4th Oct 16, 8:39 PM
    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.
    Stuck on the carousel in Disneyland's Fantasyland

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    • Batman 100
    • By Batman 100 4th Oct 16, 9:05 PM
    • 163 Posts
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    Batman 100
    • #6
    • 4th Oct 16, 9:05 PM
    • #6
    • 4th Oct 16, 9:05 PM
    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.
    Originally posted by densol
    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
    • By NYM 4th Oct 16, 9:12 PM
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    NYM
    • #7
    • 4th Oct 16, 9:12 PM
    • #7
    • 4th Oct 16, 9:12 PM
    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
    • By Batman 100 4th Oct 16, 9:30 PM
    • 163 Posts
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    Batman 100
    • #8
    • 4th Oct 16, 9:30 PM
    • #8
    • 4th Oct 16, 9:30 PM
    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?
    Originally posted by NYM
    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
    • By NYM 4th Oct 16, 9:34 PM
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    NYM
    • #9
    • 4th Oct 16, 9:34 PM
    • #9
    • 4th Oct 16, 9:34 PM
    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.
    Originally posted by Batman 100

    Yes I think it would be advisable.

    You can provide them the figures they need to assess you correctly.
    • Batman 100
    • By Batman 100 4th Oct 16, 9:39 PM
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    Batman 100
    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
    • By Batman 100 4th Oct 16, 9:40 PM
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    Batman 100
    Yes I think it would be advisable.

    You can provide them the figures they need to assess you correctly.
    Originally posted by NYM
    Thank you. This wouldn't trigger a fraud investigation or anything like that would it?
    • densol
    • By densol 4th Oct 16, 9:47 PM
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    densol
    Thank you. This wouldn't trigger a fraud investigation or anything like that would it?
    Originally posted by Batman 100
    No just explain its all confusing, have all the figures to hand and they can work it out from there
    Stuck on the carousel in Disneyland's Fantasyland

    I live under a bridge in England
    Been a member for ten years.
    Retired in 2015 ( ill health ) Actuary for legal services.
    • Batman 100
    • By Batman 100 4th Oct 16, 9:58 PM
    • 163 Posts
    • 55 Thanks
    Batman 100
    No just explain its all confusing, have all the figures to hand and they can work it out from there
    Originally posted by densol
    Thank you very much.

    I'll have another look at my P45's, do some calculations and give them another call.
    • Darksparkle
    • By Darksparkle 4th Oct 16, 10:15 PM
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    Darksparkle
    As I said previously, the claim form doesn't ask for your income for this tax year.
    • Icequeen99
    • By Icequeen99 5th Oct 16, 7:13 AM
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    Icequeen99
    As I said previously, the claim form doesn't ask for your income for this tax year.
    Originally posted by Darksparkle
    DS is right - the claim form only asks for 1 income and that would be your income for the 15/16 tax year.

    The only way to give an estimate of income for the current year is to phone them and they would then re-calculate the award.

    It is your total income for the year your need to give them, not just from when you applied.

    And to answer your question - your entitlement can only run from when you started work as before that there is no entitlement. WTC only claims are not normally backdated automatically.

    When you get the award notice it should say the start date and end date on the front page. Have you got a notice yet?

    IQ
    • Batman 100
    • By Batman 100 6th Oct 16, 8:58 PM
    • 163 Posts
    • 55 Thanks
    Batman 100
    DS is right - the claim form only asks for 1 income and that would be your income for the 15/16 tax year.

    The only way to give an estimate of income for the current year is to phone them and they would then re-calculate the award.

    It is your total income for the year your need to give them, not just from when you applied.

    And to answer your question - your entitlement can only run from when you started work as before that there is no entitlement. WTC only claims are not normally backdated automatically.

    When you get the award notice it should say the start date and end date on the front page. Have you got a notice yet?

    IQ
    Originally posted by Icequeen99
    Thank you.

    So will my award notice arrive in the post soon? Do you think I should wait until I've received that before calling them to query it?
    • Darksparkle
    • By Darksparkle 6th Oct 16, 9:47 PM
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    Darksparkle
    Call them ASAP to tell them what you expect to earn this year.
    • Batman 100
    • By Batman 100 6th Oct 16, 11:25 PM
    • 163 Posts
    • 55 Thanks
    Batman 100
    Call them ASAP to tell them what you expect to earn this year.
    Originally posted by Darksparkle
    I'll give them a call tomorrow evening and try and get it sorted.
    • Batman 100
    • By Batman 100 9th Oct 16, 4:52 PM
    • 163 Posts
    • 55 Thanks
    Batman 100
    Call them ASAP to tell them what you expect to earn this year.
    Originally posted by Darksparkle
    I've called HMRC and they've suggested I update my personal tax account online to give a more accurate estimate of my earnings for this tax year. I'm now in the process of doing this.

    But I still have a couple of questions to ask:

    My current employment contract runs until October 28th, but my employer is currently saying they have enough work to keep me on until the end of February and possibly longer than that. So when calculating my estimated income for the 2016/17 tax year, should I only include my income up until 28th February, or assume I'll still be in work earning the same rate of pay until the end of the tax year?

    Also I'm due to get a pay rise in 6 weeks time once I've been in my job 12 weeks. Do I need to include this in my estimate income for this year?
    • Darksparkle
    • By Darksparkle 9th Oct 16, 6:03 PM
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    Darksparkle
    I would provide an estimate based on working until the end of the year. You are always best to overestimate to avoid overpayments.

    And yes you would need to include the pay rise as it falls in this tax year.
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