Do we still qualify for tax credits?

GetOutOfThisMess

Hi,

I have recently been fortunate enough to receive a very welcomed pay rise at work that has resulted in my salary jumping from £45k to £55k pa. My wife cannot currently work due to a disability so as such claims incapacity benefit. I am not sure how much but I think it's roughly £100 per week.

We have an 11 year old son and have been receiving child tax credits but I am not sure if I should still be receiving them after the pay rise. Does anyone have any ideas please as I dont want to get into a situation of having to pay back any payments received?

Thanks

alwaysonthego_2

TC are awarded on the previous year's salary and I think you only need to report changes if your salary goes up by £25K. Check this link out which will explain it a bit more clearly.

Also check www.entitledto.com for your entitlements to TC.

GetOutOfThisMess

Thanks for the reply, I will check out the links you've posted.

glossgal

OP, if your salary has gone up by £10,000 then I think an overpayment is inevitable. Even if you only have the extra salary for half of this tax year then that's still around 5k more than they think you're earning.

I would personally tell them but give them an estimate of your income for the whole of the tax year so they can readjust your current award now instead of after you've had the money!.

System

glossgal wrote: »

OP, if your salary has gone up by £10,000 then I think an overpayment is inevitable. Even if you only have the extra salary for half of this tax year then that's still around 5k more than they think you're earning.

I would personally tell them but give them an estimate of your income for the whole of the tax year so they can readjust your current award now instead of after you've had the money!.

This is wrong.

An overpayment would only arise if the OP had given a reduced estimated household income between doing the last annual declaration and now as this would have resulted in the removal of the £25,000 disregard.

If the current award is still based on the income declared on the last annual declaration, ie last years income, then as long as the household income does not increase by more than £25000 before the end of the year no overpayment will arise.

See here for subsoniccoyotes explanation of the £25,000 disregard - http://forums.moneysavingexpert.com/showthread.html?t=1954065

To the OP I would say that you should contact TCO near the end of the tax year and give them a revised estimated income so that they can make sure your 2010/2011 payments start off from April 2010 being based on the more accurate income whilst waiting for the 09/10 annual declaration to come out to you.

Kimberley

You won't when the Tories get in so I would save the extra TC you receive so it's not within your budget so that when it stops you won't be any worse off.

Spendless

We've had a similar thing happen to us. A one -off bonus (taxed at 40%) plus adding on benefits in kind (company car etc) has knocked us over the 'family element of tax credits, which reduces once you go over £50k. It doesn't stop but reduces down until you hit around £58K I think when it dooes stop (it's higher if you have a baby under 1 when it stopsarund £60k I think). A few weeks after the bonus, my husbands employer had a lot of redundancies and everyone who kept their job took a pay-cut, so we now have a lower income.

GetOutOfThisMess

Thank you for all the replies, you have been very helpful.