Tax Credit decisions....

NACSA_CHAIR

Hi, my apologies if this question has been answered to death elsewhere, but need a speedy reply....

Can those of you with tax credit knowledge please confirm if dividends are included as income when deciding the award for tax credits? Ie if someone takes earnings of basic £6k per year, but has £70K dividends - is tax credits awarded on £6k or £76k??

I am fairly sure that I know what the answer will be, but my expertise is in child support law, not tax credits so I need to check before giving wrong info to client.
thanks

csnann

Tax Credits are awarded according to total income from work and investments, so I'm pretty sure they wouldn't get any, and with an income of £76k they don't need any.

alwaysonthego_2

Dividends are classed as other income and anything over £300 needs to be declared.

http://www.hmrc.gov.uk/taxcredits/start/claiming/income-hours/other-income.htm

NACSA_CHAIR

Fantastic....thanks for confirming this. Now to go break the bad new

sunnyone

NACSA_CHAIR wrote: »

Fantastic....thanks for confirming this. Now to go break the bad new

What bad news?

£70 didvidends is fabulous and should be celebrated, a total income of £76 is also excellent news to celebrate.

LizzieS_2

sunnyone wrote: »

What bad news?

£70 didvidends is fabulous and should be celebrated, a total income of £76 is also excellent news to celebrate.

I think tax credits were needed for another reason

sunnyone

LizzieS wrote: »

I think tax credits were needed for another reason

Like what?

Perscriptions are just over £100 per year which wont dent the £76K

Free school dinners wont break the bank, what other benefits are there that come close to denting £76K?

jellytastic

legal aid?

NACSA_CHAIR

Bad news = an inaccurate description of income when making the application for tax credits means for the past 5 years they have received sizeable tax credits that they were not actually entitled to.

csnann

They will be made to pay it back and should count themselves lucky if they don't end up in prison for fraud.

Starrystarrynight

Were they company directors paying themselves just under the tax threshold and taking the rest in dividends.