Tax credit help !!

hunny123

Hi,
This is my first post on here so please be gentle with me if i have done anything wrong !! I am currently on maternity leave from having my 2nd baby and with all of the credit crunch going on at the moment we are starting to struggle financially so rather than not survive on statutory maternity pay i will go back to work once my little one is 3 months and then the two of them will go to nursery.I contacted the child tax credit hot line and they told me that of my £200 child care costs a week they would pay £175 of it....but since doing this i have done the "do i qualify " calculator on the tax credits website and its not giving me a figure anything like what i was told over the phone....So now i am all worried thinking that my idea of nursery and going back to work is not going to help out either.
Our joint earnings is under the £40k threshold so i just wondered if anyone had any advice.I know they can only provide a eestimate over the phone but the difference from their website to what the lady on the phone said was £70 odd pound a week ...?!?!?

[Deleted User]

The information given by TCO and the figure on "Do I Qualify" calculator may vary if you have not given 100% identical details.

On the "Do I Qualify" calculator did you make sure to state that you were employed? Or did you state that you were unemployed.

Technically for tax credit purposes you will still be classed as being employed during paid maternity leave.

If in doubt you should do both calculations again.

hunny123

I have done the calculations again this morning and it is still different to what they tax credit people have told me....I checked i had entered all of it correctly.I rrung the tax credit helpline again this morning and they told me they cant tell me anything concrete until im actually getting the child care ....but i cannot do that until i know i can definitely afford it.

I just feel like i am going round in circles !!

mitchaa

Hunny123....The do i qualify website gives you a figure of what you will receive from now until the end of the FY, so that will be from the 08/09/08 to the 06/04/09.

You then need to work out how many weeks this is and then divide the amount it says by the amount of weeks to find out your weekly total.

It is possible tax credits have given you a yearly figure (Apr-Apr)as opposed to a 7mth figure (Sept-Apr)

Also, there is no such thing as the £40k threshold. A couple earning £35k with only £75pw costs would not receive a penny in childcare costs back.

It depends on the actual amount of the childcare costs vs income.

There has been a mistake made somewhere anyway. The maximum amount payable is 80% so if you had £200pw costs, the maximum you can possibly get back is £160pw

Where on earth does the £175 figure come from, this is not 80% of £200

Additionally, due to income you may not receive the full 80%, it works on a sliding scale so for example...

Couple A..Earning £15k with £200 costs get 80% paid
Couple B..Earning £25k with £200 costs get 60% paid
Couple C..Earning £35k with £200 costs get 40% paid

It's on a sliding scale, not everyone will get the full 80% entitlement. This is based solely on your income level. Above figures only an example of the way it works.

Another point to note is, you need to give them an exact weekly figures. Your childcare costs may well be £200pw but this wont be for the full 52 weeks of the year. The nursery we use, we pay for only 48wks of the year.

So just an example, It would be £200 x 48 = £9600 yearly costs. You would then divide this £9600 by 52 (NOT 48) to give them a true figure,

So the weekly costs in this example are not £200 but £184.61

likabu_2

The £175 figure they have given you may be the child tax credit added onto the childcare element as they go into the bank as one payment anyway.

You will be getting slightly more child tax credit anyway as your child is under 1.

Lisa