Is this TC amount right?

tigtag02

mitchaa wrote: »

People end up with over payments by either declaring false info (P60 info is matched) or by phoning up and declaring a change in circumstance. I.e as follows, hypothetical numbers...

08/09 income = £40k. Family receive an initial award of only £545 for financial year 09/10. In August 09, a change of circumstance happens, i.e a job loss, a change in working hours, a seperation from a partner. When this happens they phone up and ammend their details. The phone operator then asks for a 09/10 estimated figure. The claimant tells the operator (in Aug 09) there is no chance he/she will earn the same £40k and will now earn only £16k for that financial year.

As a result of the drop of income, the £545 award shoots upto say a £3000pa award (based on the now new figure of £16k) The claimant starts to get paid this additional income.

In december 09, they get an unexpected £5k bonus or some extra overtime. When April 10 comes along, the P60 shows a figure of £21k. The claimant will have therefore been overpaid by that £5k discrepency in the figures.

Additionally, errors by the tax credits staff are also partly to blame, sometimes it is their fu*k up.

I'm still following but in my case the income went down!!

(see TC's are why we need the confused smiley)

milliebear00001

mitchaa wrote: »

£5.5k seems about right for 2 children on a £13.5k declared income.

Each child is worth £2300 in the child elements so that is £4600. Then there is a £545 family element on top, followed by a £545 baby element. That together amounts to around £5.7k for the year. (The award may be a little lower due to the baby element only being applicable to the babies 1st birthday)

My declared income for the last tax year ias actually (now I've checked) around £18500! I do have a registered disabled spouse though, if that makes a difference.

Are you basically saying that they are 'gifting' me this massive amount of tax credits, never to be paid pack, simply because their systems are unable to process a payment based on predicted income for the current tax year?

mitchaa

tigtag02 wrote: »

I'm still following but in my case the income went down!!

(see TC's are why we need the confused smiley)

I take it you phoned up and amended your income up rather than down. Partner move in with you?

The only thing I can think of is the money you were paid upto that point where you phoned up was based on the lower figure.

I.e...You had a £10k single income so were initially receiving the maximum TC award. At xmas your partner moves in and you phone up and now claim as a couple. He has a £30k income and your joint income is now £40k. However up until that point (Apr -Dec) you were paid based on the £10k figure. It gets to the April and your joint figure is £40k.

Dont quote me (as im not 100% sure on this) but they assume you were earning £40k for that whole tax year and not from the december so any money you received from Apr-Dec at the lower rate will have been deemed as an overpayment, even though you may not have been with your partner between those months as it is based on the whole £40k for the whole tax year, not just the 4mths or so that you were together as a couple.

Hope that makes sense. In this case, it would be best to move your partner in in the April rather than the december.

mitchaa

milliebear00001 wrote: »

My declared income for the last tax year ias actually (now I've checked) around £18500! I do have a registered disabled spouse though, if that makes a difference.

Are you basically saying that they are 'gifting' me this massive amount of tax credits, never to be paid pack, simply because their systems are unable to process a payment based on predicted income for the current tax year?

They will only use predicted if there is a drop in income due to a change in circumstance. Like explained a few posts above.

If not, then they base it around the P60 earnings of the year before. (i.e the £18.5k) Your predicted 10-11 figures are solely to start off you new claim in April 2011 (Whilst the renewals process is rolled out to the millions of households)

This ensures that the tax credits for the month of April and possibly May (Whilst the renewals process is in operation) are in the right ballpark. If they never done this then millions more would get overpayments.

Disabled spouse would not make a difference to your claim, disabled children would though.

tigtag02

mitchaa wrote: »

I take it you phoned up and amended your income up rather than down. Partner move in with you?

The only thing I can think of is the money you were paid upto that point where you phoned up was based on the lower figure.

I.e...You had a £10k single income so were initially receiving the maximum TC award. At xmas your partner moves in and you phone up and now claim as a couple. He has a £30k income and your joint income is now £40k. However up until that point (Apr -Dec) you were paid based on the £10k figure. It gets to the April and your joint figure is £40k.

Dont quote me (as im not 100% sure on this) but they assume you were earning £40k for that whole tax year and not from the december so any money you received from Apr-Dec at the lower rate will have been deemed as an overpayment, even though you may not have been with your partner between those months as it is based on the whole £40k for the whole tax year, not just the 4mths or so that you were together as a couple.

Hope that makes sense. In this case, it would be best to move your partner in in the April rather than the december.

It does make sense yes but it was the other way around - actually, thinking about it now (I dont have anything to hand) I dont even think the figures changed.

Me & my partner split, he wouldnt leave and I actually amened the claim to a single claim whilst he still lived there in Feb 09 - he only received IB for part of that tax year anyway - he moved out, I let them know and come April 'we' owed them £200 odd for that tax year (confused smiley).

09/10 I claimed as single until my new parter moved in in Feb. I never filled out a new claim as 1)our joint income will only (I think) entitle us to minimum ans 2) I really couldnt be bothered with overpayments anymore!!

I am however pregnant again and I know we should claim - do you know at what point my SMP will be used as opposed to my annual salary?

Sorry for all the questions but you seemed to understand the system!

milliebear00001

Good God, I wonder if anyone has ever added up the cost of the £25000 disregard. It must have cost a fortune to the tax-payer over the years!

Thanks for all the advice.

boots1_2

milliebear00001 wrote: »

Good God, I wonder if anyone has ever added up the cost of the £25000 disregard. It must have cost a fortune to the tax-payer over the years!

Thanks for all the advice.

Thats exactly what I said too .
Hopefully no one will add it up until next year now

mitchaa

tigtag02 wrote: »

It does make sense yes but it was the other way around - actually, thinking about it now (I dont have anything to hand) I dont even think the figures changed.

Me & my partner split, he wouldnt leave and I actually amened the claim to a single claim whilst he still lived there in Feb 09 - he only received IB for part of that tax year anyway - he moved out, I let them know and come April 'we' owed them £200 odd for that tax year (confused smiley).

09/10 I claimed as single until my new parter moved in in Feb. I never filled out a new claim as 1)our joint income will only (I think) entitle us to minimum ans 2) I really couldnt be bothered with overpayments anymore!!

I am however pregnant again and I know we should claim - do you know at what point my SMP will be used as opposed to my annual salary?

Sorry for all the questions but you seemed to understand the system!

Your SMP used as opposed to your annual salary?

It's not either or, it's what you expect to see on your P60 come April every year. You may spend 10 wks on SMP in that FY or you may spend 26wks. In either case you are allowed to deduct £100pw SMP from the figures.

So if your P60 in April 11 is likely to read £15k and you had spent 26wks of this year on SMP you would deduct £2.6k from that £15k figure and declare the £12.4k

mitchaa

milliebear00001 wrote: »

Good God, I wonder if anyone has ever added up the cost of the £25000 disregard. It must have cost a fortune to the tax-payer over the years!

Thanks for all the advice.

Yes I agree, a major flaw in the system that has cost the taxpayers billions. It does not make sense and its not too hard to work out why the country is in the mess it is in. It is poorly thought out.

The tories/lib dems I think will take a good look at this. I read somewhere that 6mthly declarations may come in as opposed to 12mthly but it's early days for this government so far and no one really knows.

It is crazy that you can earn £35k say this year and still being awarded as if you were earning £10k. It is unnecessary waste. Perhaps what the tories are speaking about.

Deepmistrust

mitchaa wrote: »

I take it you phoned up and amended your income up rather than down. Partner move in with you?

The only thing I can think of is the money you were paid upto that point where you phoned up was based on the lower figure.

I.e...You had a £10k single income so were initially receiving the maximum TC award. At xmas your partner moves in and you phone up and now claim as a couple. He has a £30k income and your joint income is now £40k. However up until that point (Apr -Dec) you were paid based on the £10k figure. It gets to the April and your joint figure is £40k.

Dont quote me (as im not 100% sure on this) but they assume you were earning £40k for that whole tax year and not from the december so any money you received from Apr-Dec at the lower rate will have been deemed as an overpayment, even though you may not have been with your partner between those months as it is based on the whole £40k for the whole tax year, not just the 4mths or so that you were together as a couple.

Hope that makes sense. In this case, it would be best to move your partner in in the April rather than the december.

I can't believe that? Surely if a new partner moves in say half way through the year, they cannot expect the payments you received from April (for 6 months) to be an overypayment? Otherwise surely no one would move in with their partners at any other time of the year that April.