Can you help with regards to Working Tax Credit Underpayment?

lasshavinfun

I got my p60 and whilst I thought my earnings where going to be £12100 for last year, they where only £9494 (this is what was on my p60)
So I called the tax credits and advised them my actual earnings, for last year.
Does this mean I will be due some tax credits for last year, because i worked it out on the tax credits calculator there is about a £1000 difference in what I got and should of got.

Thanks for any help.

Orville

Yes if you gave them a higher estimate then you actually earn't then you should be due a bit back.

lasshavinfun

Orville wrote: »

Yes if you gave them a higher estimate then you actually earn't then you should be due a bit back.

Perfect thanks for that

karenx

I dont think for a difference of 3k in wages you are going to get 1k back. Prob only be a few hundred at very most

mitchaa

lasshavinfun wrote: »

I got my p60 and whilst I thought my earnings where going to be £12100 for last year, they where only £9494 (this is what was on my p60)
So I called the tax credits and advised them my actual earnings, for last year.
Does this mean I will be due some tax credits for last year, because i worked it out on the tax credits calculator there is about a £1000 difference in what I got and should of got.

Thanks for any help.

You may not get anything, your award last year was based on your income for 08/09. You would have needed to phone up with a change in circumstance in order for this to qualify as an underpayment.

If you declared £12.1k, this declaration is for the start of this financial year, not the last 1. I.e you stated your income was going to be £12.1k, but it was only £9.5k.

This means that you have been getting underpaid from April 6th this year until todays date, so about 1mths worth.

The estimate on your renewal is for the start of your next years claim so they get it approximately correct whilst waiting on the renewals.

So to understand, when you are asked what your income is likely to be for this year, this will be the basis figure that next years awards will be based around.I.e when it hits April 6th 2011, they will pay you based on the figure you estimated in this years renewal.

Hope that makes sense.

lasshavinfun

mitchaa wrote: »

You may not get anything, your award last year was based on your income for 08/09. You would have needed to phone up with a change in circumstance in order for this to qualify as an underpayment.

If you declared £12.1k, this declaration is for the start of this financial year, not the last 1. I.e you stated your income was going to be £12.1k, but it was only £9.5k.

This means that you have been getting underpaid from April 6th this year until todays date, so about 1mths worth.

The estimate on your renewal is for the start of your next years claim so they get it approximately correct whilst waiting on the renewals.

So to understand, when you are asked what your income is likely to be for this year, this will be the basis figure that next years awards will be based around.I.e when it hits April 6th 2011, they will pay you based on the figure you estimated in this years renewal.

Hope that makes sense.

Yes I kind of understand, so because my earnings where low last year, I should'nt expect any sort of tax credit underpayment because I didnt advise them?

mitchaa

lasshavinfun wrote: »

Yes I kind of understand, so because my earnings where low last year, I should'nt expect any sort of tax credit underpayment because I didnt advise them?

No.

The only way you would get an underpayment is if you phoned up to reduce your income in order to get an increased award. So an example would be.... (theoretical figures used)

08/09 earnings were £20k so 09/10 award based on this £20k figure. Some point within that year, you phoned up and stated that you had a change in circumstance and that as a result you would have a drop in income. (Loss of job, maternity, reduced hrs etc)

You tell them what's happened and you then estimate that your drop in income will be around £8k (Let's just say reduced working hrs to blame) You give them a figure of £12k so your award is then based on this figure and your payments shoot up straight away.

Then when you get hold of your P60 at the end of that tax year, it only reads £10k, you will have been underpaid as they based your award on £12k.

In your situation, I suspect the only underpayment is for the 1mth or so of this year as they are currently basing your 10/11 award on £12.1k, but they should be basing it on £9.5k. As soon as you give them the £9.5k figure, your award will increase.

paulofessex

mitchaa wrote: »

You may not get anything, your award last year was based on your income for 08/09.

This has confused me, surely the estimated figure of earning given in April 09 lets say was for the year ahead 09/2010, and is only now when you get the P60 in 2010 you can confirm actual earning, hence why overpayments can also occurr.

The whole issue of Tax Credits are confusing to me.

lasshavinfun

paulofessex wrote: »

This has confused me, surely the estimated figure of earning given in April 09 lets say was for the year ahead 09/2010, and is only now when you get the P60 in 2010 you can confirm actual earning, hence why overpayments can also occurr.

The whole issue of Tax Credits are confusing to me.

Same here im confused too....best thing I can do is phone them in the morning to see whats going to happen with my award.

Thanks for all your help guys and girls

lasshavinfun

mitchaa wrote: »

No.

The only way you would get an underpayment is if you phoned up to reduce your income in order to get an increased award. So an example would be.... (theoretical figures used)

08/09 earnings were £20k so 09/10 award based on this £20k figure. Some point within that year, you phoned up and stated that you had a change in circumstance and that as a result you would have a drop in income. (Loss of job, maternity, reduced hrs etc)

You tell them what's happened and you then estimate that your drop in income will be around £8k (Let's just say reduced working hrs to blame) You give them a figure of £12k so your award is then based on this figure and your payments shoot up straight away.

Then when you get hold of your P60 at the end of that tax year, it only reads £10k, you will have been underpaid as they based your award on £12k.

In your situation, I suspect the only underpayment is for the 1mth or so of this year as they are currently basing your 10/11 award on £12.1k, but they should be basing it on £9.5k. As soon as you give them the £9.5k figure, your award will increase.

Thanks hun, still a little confused will give them a phone tomorrow. I will let you know what they say, thanks for all your help x

motherb

if your credits were based on 2008/2009 and your earnings are lower at the end of april 2010 you will get back underpayment even if you have not informed them till now