Is working tax credits affected by the new tax codes?

ann&leo

Can anybody tell me, with the new tax codes now implemented, will this affect working tax credit payments as we have just had an extra payment into the bank and have no idea why, no letter explaining?

[Deleted User]

It wont affect it at all. Call helpline to find out why you got the extra payment. The lines are not particularly busy for a Monday.

ann&leo

Thanks, called them and the new tax code does affect it, they give you an extra tenner in your wages then take £3/week off your tax credits....thus making you worse off and not better off as they want you to believe :rolleyes:

System

I really can't understand how a change in your tax code affects your tax credits as they are 2 entirely separate things.

Your code changed because Gordon Brown got so much heat from the public regarding the removal of the 10% tax band. Ultimately this increase means you get to keep more of your gross pay by paying less tax.

Your tax credit award is based on your 07/08 gross pay not 08/09 unless there is a significant change this year and by significant I mean an increase of more than £25000.

Contact TCO again and ask them what changes have been made to your award to warrant the change in your payments.

You said that you received an extra TC payment into your account but then went on to say that your payments have now reduced.

To me this sounds as though the extra payment is what was owed to you for 07/08 following processing of your annual declaration. The reduction in your current payments could also be due to the processing of your declaration as they balance out what you have already received from 6th April 2008 with the rest of your entitlement for this tax year..

[Deleted User]

The new tax code DOES NOT affect tax credits. Your tax credits are based on your gross income - ie. before you are taxed.

There must have been some sort of misunderstanding when you called.