I earnt more than I thought (Tax Credits)

mpg

Hiya Folks

I had a claim for Tax credits with a child allowance 30 hrs and a disabilty portion Based on projected earnings for 2007-2008 totalling £700 per month then My OH had earnt and extra £2000 over the year so this years has gone down to £483.

All this was based on myself being self employed and running at a loss However I Have just finished my books 2007-2008 and I have made a profit of £ 2203.81 will this affect next years tax credits.

Cheers
Matt

Auzelia

it shouldnt affect Tax credits as you are allowed to earn up to £25k over last years P60 amount, unless you called during the tax year to change your estimated income.

so say you had a P60 combined with your OH of £13,000 you can have your next P60 go to just under £28k before you are liable for overpayment,
again this is unless you called them to change your estimate, if you did change your estimate say to expected earnings for year 08/09 to £19k then the £25k disregard is no longer in effect.

Thats why it is usually better not to change any figures with tax credits. even if your income decreases.

mpg

Cheers

My OH earnt just over 9K last year but is at uni now so her hours will drop again prob to the original amount so our combined income will be somewhere around the 10k mark.

Its just with the £200 p/m drop we already have another one the same will definitely be felt.