Child Tax Credit eligibility LOOK!

robindunne1

After reading the guidance on income taken into account when calculating CTC I read with intrest that they only take into acocunt income that is taxable. That does NOT include payments into pension funds or chartites as they are not taxable. In my position that makes a big difference as I give 10% of my income to charity and make large contributions to my pension.

I have an income of 25k, which is what I previously declared as my income, but with the deductions taken into account I only have to declare £21500, which not only means I will get £30 a week of CTC, but also means I qualify for the £500 maternity grant when our second is born in May.

After some calulations every £100 extra that I put into my pension fund I will get £68 back through tax breaks and CTC payments, so I will definately increase my pension contributions. As many employees match it and sometimes double what you contribute it is definately a good way of bumping up you pension fund for very little cost.

Have a look at https://www.entitledto.co.uk to see how much extra money you get if you deduct your pensions contributions.

Spendless

Yes I was aware that they didn't count. Does charity contributions only count if they are done via gift aid?

robindunne1

Yes they do. You must be giving via Gift Aid to benefit. If you're not giving to a charity through Gift Aid you're ffectively paying too much tax anyway. Definately look into it if you're not doing it already.

robindunne1

If anyone is looking at deducting Gift Aid payments, the amount deducted is the grossed up amount to include the tax rebate eg. If £100 is gifted the amount to deduct is:

(100/78) x 100 = £128.20

Not £100

If anyone is worried just PM and I can dot he calculation for them. I am an acocuntant so it does help.

Spendless

It wouldn't make any difference to our tax credits as we have to add on a whacking £7k due to DH benefits in kind. Not unless we whacked all his wages into a pension/gave it to charity and lived on the tax credits instead:D .

Little_Miss_Winner

.............rushes off to check entitled to......thanks robin

robindunne1

Another thought, may calculations above do not take into account WTC. So if you earn under the braken to claim WTC it will be even more of a benefit.

exil

I did some calculations myself and worked out that for a family of 2 kids, aged 16 to 19 and in full time education, you can put all except 5k of yr salary into
a pension scheme,then claim:-

- WTC - about 8k
- EMA - 3k for 2 kids
- Child Benefit - about 1k

In total you would have about 17k to live on - and Gordon Brown also tops
up yr pension contributions!

You won't be able to claim Council Tax or Housing benefit though - only 50% of pension contributions is taken into account for that.

It does smell like a loophole that the Treasury are going to close....

carlih1

exil wrote:

I did some calculations myself and worked out that for a family of 2 kids, aged 16 to 19 and in full time education, you can put all except 5k of yr salary into
a pension scheme,then claim:-

- WTC - about 8k
- EMA - 3k for 2 kids
- Child Benefit - about 1k

In total you would have about 17k to live on - and Gordon Brown also tops
up yr pension contributions!

You won't be able to claim Council Tax or Housing benefit though - only 50% of pension contributions is taken into account for that.

It does smell like a loophole that the Treasury are going to close....

Hi,

My salary is about £7200 a year, i have 2 children 6 and 2, i pay for childcare of £250 a month, and i get child benefit of £28.80 a week and ctc of £113.00 and wtc of £67.00 weekly.

If i pay into a pension is there anyway of me getting more money,

thanks for your helps!!!

Carli

robindunne1

Have a look onto https://www.entitledto.co.uk and take off how much you plan to put into your pension fund, which should give you your revised benefits.

CIS

Does your partner earn ?, the amount of tax credits you get seems low for someone on your income.