juat rang the tax credits help line..quick question!

missindecisive

I feel sooo thick! rang them thismorning as dh is pondering over a new job but as I posted yesterday, we will be worse off as his income would drop by quite a large amount (you can't put a price on your sanity can you?)

so anyway-I rang them an luckily got a very nice lady who seemed to know what she was doing, she gave me the figures of what we would get should he take this new job. HOWEVER, she did point out that it was an estimate and partially based on last years figures...?? so does that mean that; if he takes the job, after the first year, tax credits will change and then be based totally on his new wage(which is muchmuch less than what hes on now) so therefore, we will get more than the figure she quoted to me today? -o dear I should have asked her-why did'nt I ?:o

bestpud

Was your actual income for last year higher or lower than you expected to earn this year?

And, if he took the new job, would you be able to manage financially on your old tax credit award until April next year?

missindecisive

hiya, the income for last year is much higher than he would earn in his new job, so yes we could manage for now but Im worrying about what tax credits we would get in the future..next year after he's done a full year in his new job will the figure go up as he is earning much less, or is that not necessarily so?

bestpud

If you can afford to leave the changes until April (ie tell tax credits about his new income but say you don't want to lower your estimated income for this year - although, depending on your previous income you may not be able to anyway), then they will leave your award as it is until April.

In April, they will start paying you more (as they will base it on the lower income) and, when you renew your award, you will probably have an underpayment for this year, which they will pay you in a lump sum.

That is by far the best way of doing it as you will avoid any potential overpayment.

Also, if he were to find a higher paying job during next year, the changes will not take effect until April 2011.

Alternatively, if you call them and ask them to lower your estimated income now, and they increase your award now, you will need to inform them immediately if you look to earn more than you estimate, or you will face an overpayment.

I hope that helps. Say if not and I, or someone else, will try and explain it better.

ETA: if you follow the first course of action, your award will not truly reflect the lower income until April 2011 (although it should increase) as this years actual income will be made up of part higher and part lower income. In April 2011, your award will be based solely on the lower income, if he hasn't earned more, or found another job by then.

Once again, in April 2011, they will pay any underpayment for 2010/11 in a lump sum when you renew.

missindecisive

thankyou bestpud:beer:

bodeia

from http://www.direct.gov.uk/en/MoneyTaxAndBenefits/TaxCreditsandChildBenefit/TaxCredits/DG_073824

<H3>Other changes to tell the Tax Credit Office about</H3>

It’s also a good idea to tell the Tax Credit Office about changes that may mean your tax credit payments go up. Although you don’t need to do it within one month – it’s best to do it straight away as your increase in payments can only be backdated for up to three months.

bestpud

bodeia wrote: »

from http://www.direct.gov.uk/en/MoneyTaxAndBenefits/TaxCreditsandChildBenefit/TaxCredits/DG_073824

It is always wise to tell them asap but he/she is going to do that anyway.

Limana68

Hiya
Sorry to hijack this thread but I am gonna be in a similar situation next month when I reduce my hrs to 30, I will be getting less income.

I really want my tax credits to change straight away to reflect my lower income, but do I need to look on all my payslips to get the exact ammt I have been paid up until I start my new hrs?
Can anyone tell me so I have everything at hand when I ring them up?

Many thanks!

Liz x

bestpud

Limana68 wrote: »

Hiya
Sorry to hijack this thread but I am gonna be in a similar situation next month when I reduce my hrs to 30, I will be getting less income.

I really want my tax credits to change straight away to reflect my lower income, but do I need to look on all my payslips to get the exact ammt I have been paid up until I start my new hrs?
Can anyone tell me so I have everything at hand when I ring them up?

Many thanks!

Liz x

They will only ask for a new annual estimate of your income, so you only need a rough idea of what you've earned so far (or you should be able to get your earnings to date from your latest payslip). You then need to calculate what you think you will earn from now until April and add the two together.

Be very careful to inform them immediately if your income looks like it will be more than your new estimate though, as by lowering your income, you will lose the £25k income disregard and anything extra you earn will result in an overpayment.

Personally, I would add a bit extra to my estimate to cover any unexpected overtime, or payrises etc.

Limana68

Thats great thanks for your help bestpud x