Tax credit questions

timmmehh

Hi,

Me and my partner have sent off the tax credits form a few weeks ago and im wondering what to do about something, Basically the tax credit form asked details from my p60 but i got a payrise at the beggining of the financial year etc. Also i have just recently done some overtime and may well be in line for another payrise. Do i need to phone them up to tell them about my wage going up in april? as well as the overtime? I have to say i find it all abit confusing

alwaysonthego_2

Is your TC award based on this years estimated income?

timmmehh

it seems to be based on last years income due to all the details they asked for were from my p60

aj2703

My advice would be to phone them up and advise them of your new projected earnings for this year. If you don't and leave it till next april which you can do, you'll actually have earn't more then they have you down for so in effect you will be in arrears next year and actually owe them money. Tax credits works in arrears, and although it may be good for the first year earing money and getting payrises etc, if you don't notify them straight away it will come back to bite you the following year. I usually slightly over estimate my earnings ( or i used to when i was working), that way i'd never owe them money and the chances are i'd get a bit back at the end of the year.

TotallyBroke

Will your overtime and payrise, and any possible changes with your husband's wage mean that you will earn £25,000 more than last year?

If the answer is yes then tell them. If the answer is no then don't. You are allowed to earn £25k more than the previous year without incurring an overpayment.
BUT if you keep ringing and chopping and changing income they will remove the £25k disregard and will incur an overpayment.

Just a tip, look at what your payrise was this year and when you renew next year over estimate your wage by the same amount. Just incase you get another payrise.

aj2703

Hmmm new one to me, i know there is a limit where you don't have to tell them about a change in certs, but when you fill out the new slip the following april, because you never informed them your income had gone up, thus reducing your payments then you have been overpaid and they make the adjustment to lower that years credits to make up for it.

My advice still stands. If you get a payrise tell them asap. That way you will never be caught out.

TotallyBroke

I do not know how to do links to pages. But if you go to the Tax Credits website, type 'Tax credits earnings disregard' in the search box you get a pdf guide on tax credits.
On page 28 it says this...........
If your circumstances and income stayed the same throughout the year which has just ended, or if your income in that year was not more than £25,000 higher than the year before that, you should have received the right amount of tax credits.
WTC2 28

So as I said so long as the family joint earnings are not £25k more than what has been estimated for the current year your tax credits will be ok.

So for example and this is purely made up figures.
If you estimated your earnings to be £25k for this year Apr 09 to Apr2010 and got paid £20 per week tax credits then when you come to renew in July 2010 that you see you actually earned £35k they will ignore the extra money.
If you then estimate Apr 10 to Apr 11 will be £35k you may only get £15 per week tax credits but there will be no overpayment for the previous year.

aj2703

Well it's upto the OP. My experience differs from the info you have given Totally, but then when it comes to Tax Credits etc, when have they ever gotten anything right.

alwaysonthego_2

If your award is based on 09-10 estimate and your income goes up then you will get an overpayment.

If the award is based on 08-09 actual figures than you have a £25000 disregard as long as your income does not go down or up by this amount then you will not get an overpayment.

TotallyBroke

It is upto the OP yes, you have given your opinion and I have given mine.
There maybe others that come along later and agree with both of us.

JMerch

And the other comes along now....

Your both right. If the income for the current year does not increase by more than £25k on last years income it will not affect the award. FOR THIS YEAR. However when the provisional award for 2010/11 is calculated it will be based on the most recent figures held. So, if TCO have not been notified of the increase, then the initial 2010/11 award will be too high causing an overpayment on the 2010/11 award.

I would always advise to notify of an increase in income before the end of the tax year to prevent this from happening. You can wait until you have found out if you will get the second payrise before doing this, so that you can give them a more accurate figure. But make sure you call BEFORE march 2010 to prevent an O/P.