taxs credits query

moo842

hi there

we currently get ctc, at over the base rate, my partners wages have increased by over £4000 this year. i have called tax credits to tell them, and received my new notice today, but nothing has changed for this year. Is this correct? they say no changes will be made until april, but will i owe them money for what i have been paid this year? Or do they really disguard this extra income for this year?

clairec79

Mine have gone up a lot (about £15,000) - I clairified with several people (both on here and with tax credits) and if the difference is within £25,000 they don't change it and don't accrue a overpayment

Auzelia

you are allowed to earn up to £25k over your last P60 amount. So in actual fact you didnt have to call them before the start of the new tax year as it wont change your award for this tax year as its based on last years P60 amount, however, Now that you have changed your earnings for this year, you are no longer entitled to this bumper.
So if your partner earns more than the £4k you declared then you may receive an overpayment. x

peediedj

Auzelia wrote: »

you are allowed to earn up to £25k over your last P60 amount. So in actual fact you didnt have to call them before the start of the new tax year as it wont change your award for this tax year as its based on last years P60 amount, however, Now that you have changed your earnings for this year, you are no longer entitled to this bumper.
So if your partner earns more than the £4k you declared then you may receive an overpayment. x

but surely if the other person didnt inform them of the change they could fine him come next tax year? or am i wrong??

Auzelia

no as long as you inform them for the new tax year, i,e the 5th of April so it can be started for the 6th of April

If you give another estimated income after your declare your P60 income then the 25k disregard becomes null and void.

Dont ask me why,

So ... say P60 07/08 10k
you get a wage increase of 5k
call up tax credits and declare it so estimated wage is £15k
you then get a bonus of £2k taking your earnings to £17k

you will no longer be able to use the disregar of £25k and may have an overpayment due to the extra £2k

if you dont change your income during the year and call with the extra £7k then you wont have an overpayment as you can earn up to £25k over your last P60 amount.

You get what I mean?

Auzelia

btw the same applies if your earnings decrease and you call them up.

If you earned P60 07/08 10k
then this tax year expect to only earn 7k
call them up and declare this and earn 8k then you will also get an overpayment,

I find its best to always leave it the way it is, that way if you do earn less then you may get a repayment off them due to lower income. Thats what I am doing.

Either that or if you do have to change your income for any reason then always overestimate. x

peediedj

Auzelia wrote: »

no as long as you inform them for the new tax year, i,e the 5th of April so it can be started for the 6th of April

If you give another estimated income after your declare your P60 income then the 25k disregard becomes null and void.

Dont ask me why,

So ... say P60 07/08 10k
you get a wage increase of 5k
call up tax credits and declare it so estimated wage is £15k
you then get a bonus of £2k taking your earnings to £17k

you will no longer be able to use the disregar of £25k and may have an overpayment due to the extra £2k

if you dont change your income during the year and call with the extra £7k then you wont have an overpayment as you can earn up to £25k over your last P60 amount.

You get what I mean?

i get what you mean,but iam sure someone who works for the tax credits office will say that you shouldnt do this,what happens if half way thru the year your £3-4k over your total and they ask you to fill in a compliance form?will it be null and void then?

peediedj

clairec79 wrote: »

Mine have gone up a lot (about £15,000)

must of been one heck of a pay rise? didnt they fine you for not telling them about a change??

Auzelia

subsoniccoyote is usually good at explaining it. x

Auzelia

Child and Working Tax Credits rates and Child Benefit

As announced in the Pre-Budget Report, from 6 April 2006, the child element of the Child Tax Credit will be increased in line with average earnings. In addition, the disabled child elements of Child Tax Credit will be uprated in line with inflation. The elements of Working Tax Credit will also rise in line with inflation.
The child element of Child Tax Credit will increase at least in line with average earnings up to and including 2009-10.
The disregard in tax credits for increases in income between one tax year and the next rises from £2,500 to £25,000 from April 2006.
The rates of Child Benefit and the Guardian's Allowance will rise in line with inflation, except for the lone parent rate, which remains frozen, from 11 April 2006.


taken from here http://www.hmrc.gov.uk/budget2006/pn02.htm

clairec79

peediedj wrote: »

must of been one heck of a pay rise? didnt they fine you for not telling them about a change??

I did inform them of the change (I qualified and went full time instead of part time unqualified) I rang them to change employer and hours and said how much I would be earning this year (with an overestimation) they said they would go on last years still as it was easily within the £25,000 difference they allow) - and I do have names, dates and times of when this information was given (more than once as I had to ring back with PAYE number)