Started Work - Tax Credit Query

Ossireo

I started work on 29 May 2009 after being on Income Support.& Child Tax Credit for 20 months. My renewal had already gone back which confirmed my income was £0.00 for 08/09.

I contacted TCO immediately and confirmed that my annual salary will be £15,000, which in effect over estimates it for the year as we are already a few weeks into 09/10 and I wanted to over estimate rather then under estimate! I have received my award (which matches the entitledto estimate about 140pw) but it concerns me that they do not deduct any income for this year, the estimate for 10/11 matches (75pw)what I would have expected to receive this year as it takes the £15,000 into account.

The guy I spoke to at TO has advised me that as long as my income does not exceed £15,000 then I will not have any overpayment for 09/10, but surely when I finalise my 09/10 and provide my P60 for this year which shows my income they will revise this award, take £15,000 into account and there will be an overpayment?? I just want to make sure that I dont lose next years entitlement as I am trying to get a bit of consistancy in my life in respect of income so I can work on my debts!

Sorry to be all confused, but the tax credit system has always been alien to me as I am JSA/IS & Pension Credit trained and not taking into account a current income is messing with my head! As it stands at the moment I am going to have a pretty sweet year with tax credits and I can pay a fair bit off my debt!

lorelai34

Tax credits always base the award on the previous year income unless the current year income is estimated to be any lower or more than 25,000 higher than the previous year. So I would say they are correct to be basing your award on your 08-09 income and its good that you have estimated 15000 for 09-10 as it means when the new tax year starts this is the figure they will use which should reduce your risk of being overpaid from the beginning of the next tax year to when the renewal gets done.

Ossireo

When they finalise my 09/10 payments wont they consider it an overpayment as they have not taken any income into account?

The_Dragon_Adopter

There will not be an overpayment on this years award, though your provisional payments from 06/04/2010 will be based on this figure