Confused : Working Tax Credits

Davewils

I recieve working tax credits but i'm not sure if i should. I live with my girlfreind, and earn 18k before tax. However every time i run a tax calculator and when i filled out the tax credits forms they all specifically said "what was you income for 2009/2010?"

I was unemployed for the majority of 2009/2010 and didnt receive any benefits. Once I found work (November 2009) I applied for working tax credits inputting the information that was requested (back then i think it wanted info for 2008/2009).

I havent lied about how much I earnt on both these occasions, i'm just worried becuase now i'm earning 18k a year, i'm still recieving working tax credit based on last years figures. Does it work retrospectively and everything is correct (as various online benefit calculators tell me) or will I have to pay a load back at the end of this new tax year?

kurjam

you will recieve tax credits based on what you earnt in 09-10.. as they seem to work 1 tax year behind...

the income you earn from april this year to the end of the tax year in 2011, will be used to re-assess your payments from april 2011

Snakeeyes21

Thats correct, tax credits are based on your last years earnings, so as you were unemployed for much of last year you would be entitled to the full rate of tax credits for this year..

A person who has been unemployed for a year would recieve 50 odd quid a week for the first year after returing to work, after that first year the tax credits would reduce to next to nothing if they are on a reasonable income.

Davewils

Fantastic cheers, they're basically paying my petrol costs at the moment so they're are definatly helpful and i'd notice a bit of a dent in my income without them.

Glad to hear i'm not going to go to prison. At least for that!