Working Tax Credt - Help!!!

gabby71

Hi

I started work in Ocotber, had earned roughly £6500 in the previous tax year.
My salary is £12500 p.a. and have been awarded £144 per week in WTC (single mum with 1 child).
In my job, we can earn incentives for productivity - althought these are not guaranteed every month (you can get them taken away for certain things), I have earned an extra £200-£300 before tax for the last 3 months.
Hopefully this will continue, but I'm worried how this will affect my tax credits - I did call the helpline and was told (rather abruptly) that this would not affect my payments, not entirely comfortable with that answer - surely they take more away the more you earn???
Dont want to get stung for overpayment!
Also need to know if my tax credits will drop hugely as I obviously budget with what I have coming in now, and am looking nto the possibility of buying a newer car - dont want to enter into anything and then find I can't keep up the payments!
Tax Credits are sooo confusing!

thanks

Gab

Morporkian

Not sure what they'll do right now (probably have a bit of an over payment and take it off of the amount you're entitled to this year?) but for this tax year, perhaps you could over estimate your earnings to allow for any bonuses you might get?

EG: If you you'll get between £200-£300 a month in bonuses when you do get them, then overestimate by £2,400-£3,600 for the year if you can afford to. It will reduce your WTC/CTC payments throughout the year, but next April-June when you renew you will get a lump sum back
If you cannot afford to overestimate the entire amount, then maybe just allow for 6 months worth of bonuses? Then, if you did get them every month, any overpayment would be less.

EDIT:
To get a rough guide try entering different amounts into www.entitledto.co.uk and seeing what it comes out as. It's not perfect, but it should help a bit (Also try on www.hmrc.gov.uk too)

System

Your 2009/2010 award was based on your £6500 income in 08/09 and as long as your actual 09/10 income has not exceeded the £6500 by more than £25000 there will be no overpayment.

The payments you are receiving now are still based on that £6500 and are called provisional payments as they are paid whilst they wait for you to return your annual declaration.

You will soon receive your annual renewal pack and on it you will declare your 2009/2010 taxable income which will include your employment plus any taxable benefits you received prior to starting work. When you return that to TCO they will then use those figures as the basis of your 2010/2011 award and you will probably see an adjustment to your payments.

HTH

gabby71

thanks both for the help, I understand a little more now

Regards

Gab