Tax Credits Help Please

kindofagilr

Thank you very much xx

kindofagilr

wrote:

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

Thanks for that, I didn’t know that.

wrote:

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.

Why will I need to supply 08/09? As baby is due in March 2010 then wouldn’t that be 09/10 tax year I need?

wrote:

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.

Ok, so I need to know how much I earned in 09/10 years which will be more than £16,853 as I have done overtime. OH’s will be the same, I am not due to start SMP till 5th Sept 2010/

wrote:

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.

So on the estimated figure I need to tell them how much I think I am going to get? Wow this is complicated lol

So if I work 27 hours a week and come out with roughly £853 a month after tax would £13647.99 work as a estimate (I just divided wage by 3 then times by 4 to get 25%)

I break up on Feb 8th 2010 and am taking 4 weeks annual leave
Start maternity leave on March 8th 2010, I get full pay for 26 weeks
Then I start SMP on 6th Sept 2010 and my 13 weeks SMP (and no pay) is up on 5th Dec 2010
Then I am taking leave on 6th Dec 2010 – 3 Jan 2011

So as you state I can take £100 off my SMP weeks, would you take £1300 off my estimated figure making my wage for 10/11 £12347.99

wrote:

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.

Thanks for your help, sorry for the millions of questions, but I want to get this right lol

mitchaa

kindofagilr wrote: »

Thanks for that, I didn’t know that.

Yes, they need your child benefit ref number to process the CTC claim form. You must sort your CB out first. This generally takes a few weeks before you can even think about filling in the very long winded tax credit form. It can take a 2-3mths after the birth of your child before you receive anything, but it will get back dated.



Why will I need to supply 08/09? As baby is due in March 2010 then wouldn’t that be 09/10 tax year I need?



Because you are claiming in tax year 09/10 all be it for 1 month only (Mar 10 to April 10) This tax year is based on earnings between April 08 and April 09. It is complicated as you may get away with it, as there is not a hope in hell you will have tax credits sorted out before April 2010 giving the birth of your child a month before. When you receive the CTC form, it will therefore be in the new tax year format asking you earnings details of 09/10 (Apr 09-Apr 10) My point was due to the fact that you will be claiming for 1 month in the old (current) tax year.

Ok, so I need to know how much I earned in 09/10 years which will be more than £16,853 as I have done overtime. OH’s will be the same, I am not due to start SMP till 5th Sept 2010/



Yes, it is crucial that these figures are accurate. Many mess it up and then wonder why they owe thousands back in overpayments. Its easy to do, when you get your March pay statements through at the end of March, quote these figures to tax credits. (They do cross refer your P60 info so make sure you quote the right figures)

So on the estimated figure I need to tell them how much I think I am going to get? Wow this is complicated lol

Yes, but do the above first to begin with and once your initial award has been sorted out based on your 09/10 income, phone them up when your income drops to report a change in circumstance (I guess September?) You will then need to estimate what you think your P60's (Or March 2011 pay statements) will state. Its always best to over estimate so if you think you will both earn £27k, quote £28k just to be on the safe side. Dont worry if you over estimate, you will get paid the difference back at some point, just be sure not to under estimate.

So if I work 27 hours a week and come out with roughly £853 a month after tax would £13647.99 work as a estimate (I just divided wage by 3 then times by 4 to get 25%)


I break up on Feb 8th 2010 and am taking 4 weeks annual leave
Start maternity leave on March 8th 2010, I get full pay for 26 weeks
Then I start SMP on 6th Sept 2010 and my 13 weeks SMP (and no pay) is up on 5th Dec 2010
Then I am taking leave on 6th Dec 2010 – 3 Jan 2011

So as you state I can take £100 off my SMP weeks, would you take £1300 off my estimated figure making my wage for 10/11 £12347.99



Thanks for your help, sorry for the millions of questions, but I want to get this right lol

Your last part is difficult to answer as whilst you are on maternity leave your wage will obviously still be based around your full 37.5hr wage. I take it you will only drop down to 27hrs after all your maternity leave has finished.

mitchaa

Just to help you with your figures....

£16,853 / 12 = £1404pm

April = £1404
May = £1404
June = £1404
July = £1404
Aug = £1404
Sept to Dec = 1 week full pay to the 6th of Sept (£16,853/52) = £324, followed by 13 payments of SMP up until 6th dec which works out around £123pw (£123 x 13 + £324 = £1923) You are allowed to deduct 13 x £100 so leaving £623 for the period.
Dec 6th to Jan 3rd = 4wks at full pay so (4 x £324 = £1296)

So up until 3rd January, your earnings will be (5 x £1404 + £623 + £1296) = £8939.

From 3rd of January to end of March, you will then be going back 27hrs? If so, divide your monthly salary of 1404 by 37.5 (or how many hours you are contracted for) and then multiply by 27 to get your new monthly figure. I make that around £1011pm if based on a 37.5hr fulltime week.

So January = £1011
February = £1011
March = £1011

£8939 + £3033 = £11,972.

Are you NHS staff? 26wks full pay sounds familiar? If so you will probably get a couple of payrises during that year that you need to take into account? 1 increment, 1 inflation?

If so, I would declare £13k as your earnings to take these rises into consideration.

Hope that helps

kindofagilr

Thanks so much for your help, you have been a life saver, I couldnt have worked all this out!

No I am DWP, so we are due a rise in July, but I am sure the tories have something to say about it if they get in power (pretty sure I read somewhere that they want to freeze our pays this year?)