How does WTC work? Why cant we have any?

misterbarlow

On the HMRC WTC website there is an example as for if you are entitled to WTC, which is as follows...

Example 1

Mr and Mrs Khan both work full-time. Between them, they earn about £25,000 a year. They have three children. They get about £55 a week in tax credits.
If their income was higher, and they earned about £50,000 a year, they'd get about £10 a week instead.

I work 37hrs/week and earn £25k. My wife has not worked since leaving work to have our first child in Nov05, she had our second in Aug08.

We are struggling to cope lately with rising bills, mortgage etc, and considering her going back to work p/t in the summer, but we have childcare to think of as our eldest is only in nursery 3hrs a day, and the baby will still only be 10 months by then, and are trying to work our if it will even be worth it or if we will get just as much help from WTC etc if she delays for a while.

I entered all this on the are you entitled section, and was told we are not entitled to any WTC at all.
I also sent off a letter detailing all this and they replied again saying we ar entitled to CTC which we already get of £886/year, and that we 'would' be entitled to £4310/year of WTC, but reduction due to my income is £4310 and so amount we are entitled to is 0.00.

So how come in the example that a joint income of £25k and 3children gets £55/week, but my single income of the same and only 1 less child results in ZERO. Even on £50k the example family still get £10/week!
We get nothing on £25k...

p00hsticks

I can only guess that some of the other variables come into play - from looking at the detailed Tax Credit calculator, they seem to take into account if anyone in the family is disabled, if you are paying for child care, etc etc etc...

http://www.taxcredits.inlandrevenue.gov.uk/Qualify/DIQHousehold.aspx

dmg24

The example given appears to take into account CTC as well as WTC.

misterbarlow

even so the example is £55 a week and we get about £77 a MONTH CTC...

tiptoe_mouse

misterbarlow wrote: »

even so the example is £55 a week and we get about £77 a MONTH CTC...

It's the childcare costs that make a massive difference. I had a bit of a play with the calculator, and put in made-up details for a family with one full time earner on £25,000, one non-earner, and three kids. I got a figure similar to what you receive. I then went back and changed it to two full-time earners on £15,000 and £10,000, and put in that all kids were in childcare, totalling £300 a week. This time the CTC came to over £3000.

HTH

tiptoe

bestpud

Has your income reduced this year, or over the course of last year?

Are you repaying an overpayment?

Is one of their children under 1 year old, in which case they will receive an extra £10 a week.

It makes no difference whether one or both of you work, it is based on the household income. It just happens that you, on your own, earn as much as they do jointly.

bestpud

tiptoe_mouse wrote: »

It's the childcare costs that make a massive difference. I had a bit of a play with the calculator, and put in made-up details for a family with one full time earner on £25,000, one non-earner, and three kids. I got a figure similar to what you receive. I then went back and changed it to two full-time earners on £15,000 and £10,000, and put in that all kids were in childcare, totalling £300 a week. This time the CTC came to over £3000.

HTH

tiptoe

I thought about childcare but assumed they'd mention it in the description.

It's misleading otherwise imo.

tiptoe_mouse

bestpud wrote: »

I thought about childcare but assumed they'd mention it in the description.

It's misleading otherwise imo.

I'm not sure - they do state that both work full-time. So it's reasonable to assume the children are in childcare, I reckon.

tiptoe

bestpud

tiptoe_mouse wrote: »

I'm not sure - they do state that both work full-time. So it's reasonable to assume the children are in childcare, I reckon.

tiptoe

Yes, sorry, I wasn't saying you are wrong, in fact I am sure you are correct.

I was thinking aloud as much as anything.

I do think they should be specific about things like that if they are going to give examples.

Icequeen1

There is no childcare in the example of Mr and Mrs Khan.
I think the example of Mr and Mrs Khan is out of date and based on 2007/2008 figures.

They get the following elements:

WTC Basic
WTC Couple
WTC 30 hour

CTC child 1
CTC child 2
CTC child 3

Family element

If you add all of that up, it comes to maximum of £10,233 tax credits. Reduction due to income is 7318 so that means their TC entitlement is roughly £2914 per year.

However, they get nil WTC, it is all CTC. The reason they get much more than the OP is because they have 3 children (so 3 x child elements whereas the OP has only 1 child element).

There are no childcare costs, but as I say, the example is based on 07-08 figures it seems.

With regards to 50k question - everyone gets basic CTC up to around 50k (some people will still get it higher than that). This is the basic family element of 545 per year - so roughly £10 per week. You would still get that if your income was 50k as well.


IQ

real1314

misterbarlow wrote: »

even so the example is £55 a week and we get about £77 a MONTH CTC...

£55 a week for 3 kids or £17 a week for 1 kid?

They effectively have £38 extra a week for 2 kids or £19 per kid. Seems about right to me.
They get more as tax credits has extra amounts for each child.

You could even add in the Child benefit and you'd have £36 a week for 1 child and they'd have £33 per child.