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    • lacavera
    • By lacavera 17th Oct 16, 12:19 PM
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    lacavera
    CTC - pay rise and overpayment query
    • #1
    • 17th Oct 16, 12:19 PM
    CTC - pay rise and overpayment query 17th Oct 16 at 12:19 PM
    I have just received a pay increase, starting September 2016 which means our joint income goes from £33,000 per annum to £44,000 per annum. I have notified HMRC and they said it is likely our CTC payments will stop as we are over the £40,000 threshold, which I totally accept. They also said there is likely to be the need for us to repay any overpayment but were unable to tell me how much this would be as it is a 'hypothetical' situation. I realise that we won't know the full picture until April 2017 but the thought of having to repay huge debt is filling me with dread. Does anyone know how the overpayment is recalculated? Up until this September, we were under the threshold, so will it be the total of any CTC payments made since then, even though we are still officially under the £40,000 'cap' until the end of this year. Really confused!
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    • Darksparkle
    • By Darksparkle 17th Oct 16, 1:31 PM
    • 3,430 Posts
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    Darksparkle
    • #2
    • 17th Oct 16, 1:31 PM
    • #2
    • 17th Oct 16, 1:31 PM
    It's based on your income for the tax year (and how that compares to last year).
    • Caz3121
    • By Caz3121 17th Oct 16, 1:37 PM
    • 9,975 Posts
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    Caz3121
    • #3
    • 17th Oct 16, 1:37 PM
    • #3
    • 17th Oct 16, 1:37 PM
    Is your joint income going to be £44k this tax year or for future years? (if you have only received the increase then you will have x months at pre-increase plus y months at increased level)
    If at the end of the tax year you are over the threshold for receiving tax credits ...eg if you had known the salary at the start of the year you would not have received any then you may have to pay back the years worth...
    • lacavera
    • By lacavera 17th Oct 16, 3:38 PM
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    lacavera
    • #4
    • 17th Oct 16, 3:38 PM
    • #4
    • 17th Oct 16, 3:38 PM
    Thank you for your prompt replies. I have only just received the pay increase (September 2016 payslip) so this is why I am a bit confused as to whether they will ask for all of this tax year's CTC back (approximately £3000 since April 2016) or a percentage of it, as until last month we were well under the cut-off threshold. Does that make sense?
    • NYM
    • By NYM 17th Oct 16, 4:06 PM
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    NYM
    • #5
    • 17th Oct 16, 4:06 PM
    • #5
    • 17th Oct 16, 4:06 PM
    As Caz wrote, it's the total for the year that the CTC would be based on.

    If what you've earned to date plus expected earnings up to April '17 would take you over the threshold then I imagine you'd have to repay the CTC you've already received.
    • Darksparkle
    • By Darksparkle 17th Oct 16, 4:15 PM
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    Darksparkle
    • #6
    • 17th Oct 16, 4:15 PM
    • #6
    • 17th Oct 16, 4:15 PM
    Thank you for your prompt replies. I have only just received the pay increase (September 2016 payslip) so this is why I am a bit confused as to whether they will ask for all of this tax year's CTC back (approximately £3000 since April 2016) or a percentage of it, as until last month we were well under the cut-off threshold. Does that make sense?
    Originally posted by lacavera
    Makes perfect sense but as said, it depends on the income for the tax year (not just the new salary) and how much of a difference there is from last year.
    • Sambella
    • By Sambella 17th Oct 16, 4:15 PM
    • 147 Posts
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    Sambella
    • #7
    • 17th Oct 16, 4:15 PM
    • #7
    • 17th Oct 16, 4:15 PM
    Thank you for your prompt replies. I have only just received the pay increase (September 2016 payslip) so this is why I am a bit confused as to whether they will ask for all of this tax year's CTC back (approximately £3000 since April 2016) or a percentage of it, as until last month we were well under the cut-off threshold. Does that make sense?
    Originally posted by lacavera
    It's the way they do things!!

    You are usually assessed on last years income but PAID out during this year. So if your income for this year will be greater it therefore results in the overpayment.
    • Darksparkle
    • By Darksparkle 17th Oct 16, 4:33 PM
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    Darksparkle
    • #8
    • 17th Oct 16, 4:33 PM
    • #8
    • 17th Oct 16, 4:33 PM
    It's the way they do things!!

    You are usually assessed on last years income but PAID out during this year. So if your income for this year will be greater it therefore results in the overpayment.
    Originally posted by Sambella
    Not necessarily. Tax credits is based on last year's income unless the current year income increases/decreases by £2500. This amount is also disregarded e.g.

    Last year £20,000 this year £30,000 - Tax credits will be based on £27,500
    • macca1974
    • By macca1974 17th Oct 16, 4:57 PM
    • 178 Posts
    • 156 Thanks
    macca1974
    • #9
    • 17th Oct 16, 4:57 PM
    • #9
    • 17th Oct 16, 4:57 PM
    Firstly, congratulations on the pay rise!

    You've had an £11,000 pay rise, but not until your September pay packet. So will have it for the 7 months (I think). So I would assume that your income is going to increase by circa £6,416. If you add this to the £33K, then you get to £39,416 which is a bit below the threshold. If you knock of the £2,500 dis-regard that is mentioned below, then your assessable income will be £36,915. So I would have thought (and I'm no expert in this), that would allow you to go onto a CTC calculator and work out what your award for the year should be. You can then see how much you have / will receive and the difference will be what you would need to pay back.
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