Tax Credits Help Please

kindofagilr

Me and OH currently work full time, I earn £16853.00 before tax and OH earns £18500.00 before tax

My come out pay each month is £1093.09 our tax codes are 647L (I think, mine deffo is, not sure on OH but cant see why it would be different)

We are due our first baby on 8th march and I am trying to work out how many hours part time to go to, and how much tax credits we would get.

If I dropped my hours to the following, how do I work out roughly what my pay will be before tax? and how do I then work out what tax credits we would be entitled to?

24 hours per week £778.97
27 hours per week £853.95
28 hours per week £879.09
32 hours per week £979.00
34 hours per week £1029.06

We will be putting baby in childcare/nursery here at work which is £27 a day for either one day a week or two (if that helps)

I understand we would get £20 a week Child Benefit

I hope this makes sense

Thanks in advance

karenx

Try inputting all your details into entitleto.com and should give you a rough estimate

kindofagilr

Thanks I will give it a try, i've seen that site before and it confuses me lol, but I will give it a go

karenx

As long as you fill in all your details that apply to you and then for DOB of baby put in yesterday.

kindofagilr

ok doing it now thanks

kindofagilr

Hmm I dont think I did it right, it said that we would be entitled to
£127.52 Weekly Tax Credit
£20.00 Child Benefit

I dont think thats right, we earn too much?

karenx

That will include your childcare costs of 80% of £54

kindofagilr

Hmm, I am just very confused

I just did it again on the HMRC tax credits website using the childs DOB as yesterday it said we would get £252 between now and then which is £21 a week (plus £20 child benefit)

mitchaa

When your baby is born, you need to apply for child benefit before you do CTC.

This will take a good few weeks to be processed which will definitely take you into the new FY (10/11) as opposed to the current 09/10. On your CTC form it will ask you for a few sets of figures.

Your 08/09 joint income in order to be awarded for the 1 month that your child is here in this tax year (March 10 to April 10) Your award will be peanuts based on purely 1 month.

They will then ask you for your 09/10 income in order to base it on the 10/11 tax year, so you need to tell them the figures from your P60's when you get hold of them.

Your partners will definitely be £18.5k (unless he's had bonuses or OT or even a payrise) Yours will be £16,853 as you said as I suspect you wont start SMP until after April 10? If you do start it before you are allowed to deduct £100pw for the weeks that you have been on SMP, but anyway it will be very close to this £16,853 figure.

So you will have to declare a 09/10 income of approx £35.5k. This is then used for your awards from April 10 to April 11.

To complicate things further, you can then ring up TC and inform them that you wont earn the same £35.5k in FY 10/11 as you are dropping your hours. You will then be asked to estimate a figure and give it to them to which a new award will be based around. It is important that you over estimate, not under estimate as you will end up with an overpayment if you get it wrong.

Your partner will still earn £18.5k (Or will he get an inflation payrise, promoted/overtime/bonus? and you will need to work out what your salary will be (If you are going to drop down to 24hrs pw so £779pm or around £9300pa ) then you will obviously need to add that, but again it gets more complicated as you'll spend a bit of time in FY 10/11 on SMP so you are not going to earn that full £9300.

Be sure to do your homework on this. A lot of people get it wrong and end up owing thousands.

On a £35.5k declared income for FY 09/10, you will not get childcare costs paid for you with only £27/54pw costs. You will only receive the basic amount of tax credits around £21pw in 1st year dropping to around £10.50pw when the child is 1.

Its a very complicated system.

mitchaa

Entitled to website is wild. Sometimes it gets it spot on but other times its highly innacurate.

You are better off with the HMRC do i qualify calculator

mitchaa

kindofagilr wrote: »

Hmm, I am just very confused

I just did it again on the HMRC tax credits website using the childs DOB as yesterday it said we would get £252 between now and then which is £21 a week (plus £20 child benefit)

That seems correct to me yes.

The £252 is irrelevant as the child was not born yesterday so obviously of no use but the £21pw is accurate. If it is born 1st week in March, you should get 4wks of £21 or so.