child tax credit and confussed

liverpool34

hi just after a bit of advice.tax creditc onfuss me.last year i got tax credits based on 17000 from income of 2008/09.they started this years child tax credits based on income of 17433 for 2009/2010s saving everyone gets a pay rise in the reward letter.when i renewed i told them my earnings on p60 for year 2009/10 where 19200.i know that means i have been overpayed since april this year as it should have been based on 19200 but will it have any effect on last years child tax credit entitlement(april 09 till march 10)
thanks in advance for any help

kerry13238

you will prob find this years award is lower to cover the overpayment from last year and you award will also go down cause will be bassed a few hundered above this years figures check entitled to for this years entitlement but remember they will also deduct some from this years to cover last years if that makes sence

liverpool34

why should last years entitlement be wrong though i told them i earned 17000 for 08/09 which was correct.they based this years award on the fact i may earn slightly more for tax year 09/10 which they put at 17433.so from april 6th 2010 it was based on that figure.when phoned to renew and said my exact income which was 19200 for 09/10.the way i read it was the letter said we will base your award from april 2010 on 17433.00 if this is not the correct amount we may overpay you from april 6th 2010.

liverpool34

[FONT=Arial, Helvetica, sans-serif]i found this on an advie site is this correct[/FONT]
[FONT=Arial, Helvetica, sans-serif][/FONT]
[FONT=Arial, Helvetica, sans-serif]The annual declaration asks for details of income for the tax year just passed. For example, for an award made in 2009/10, you must give income details for the tax year 2009/10 in the annual review that takes place in the summer of 2010. [/FONT]
[FONT=Arial, Helvetica, sans-serif]The Tax Credit Office, in the initial decision at the beginning of the year, usually bases the award on income in the previous tax year (the exception to this is where you are on income support, income-based jobseekers allowance, income-related employment and support allowance or pension credit, when your income is treated as nil). For example, for an award made in 2010/11, the initial award is based on income in 2009/10. Following the annual review, the final award may either continue to be based on income in the previous tax year or switch to income in the year of the award. The rules say that you use the previous year’s income as the basis for a tax credit award unless:[/FONT]

• [FONT=Arial, Helvetica, sans-serif]income in the year of the award is lower, in which case it switches to income in the year of the award, or
  [/FONT]
• [FONT=Arial, Helvetica, sans-serif]income in the year of the award exceeds the previous year’s income by more than £25,000, in which case income in the year of the award minus £25,000 is used
  [/FONT]

[FONT=Arial, Helvetica, sans-serif]Example – award for 2009/10
In July 2010, Isla is completing an annual declaration about her award from April 2009 to April 2010. In the previous year, from April 2008 to April 2009, Isla’s income was £8,000 from earnings. This is the figure the Tax Credit Office used when it first made the award. In the year of the award, April 2009 to April 2010, Isla’s earnings are £23,000. This is the figure she puts in the annual declaration. The Tax Credit Office finalises her award using income of £8,000. Although Isla’s income has increased by £15,000, this is below the £25,000 threshold and therefore her final entitlement is based on the previous year’s income. [/FONT]

helenj1

i think everyone is confused im sure someone like taxcredithelp will be able to advise

liverpool34

any help or advice will be great

TotallyBroke

liverpool34 wrote: »

why should last years entitlement be wrong though i told them i earned 17000 for 08/09 which was correct.they based this years award on the fact i may earn slightly more for tax year 09/10 which they put at 17433.so from april 6th 2010 it was based on that figure.when phoned to renew and said my exact income which was 19200 for 09/10.the way i read it was the letter said we will base your award from april 2010 on 17433.00 if this is not the correct amount we may overpay you from april 6th 2010.

Ok this is how I understand it and I hope it makes sense. Tax credits are worked out by Tax year so April to April but because they do not send out renewal forms until after April the Tax credit paper trail is late by 3 months.
What I can gather from what you have said. They increased your earnings to cover any payrise from the previous year and they are saying they will continue to use that figure for the beginning part of this year (April 6th - July 31st) until they get your actual earnings of last year. They will then base the rest of the year on the £19,200 that you actually earned.
So they have given you an award of £17,433 converted into Tax credits of AA divided by 52 = BB and will be paying you for 17 weeks at BB amount.
Then for the other 35 weeks they will pay the award of CC which is 19200 for the year converted into an award of XX amount for the year. Divide XX amount by 52 to give you weekly figure of YY... minus what has been already been paid to you which is BB amount to give you new amount of CC for the rest of the year. Then April 2011 you will continue to get CC until you send in new declaration.

I really hope that makes sense and is correct... please anyone correct me if I am wrong and try and explain it to me lol

Edit.... I do not think it will have any baring on last years award as I think you can earn more than is declared as no-one can predict overtime, bonus etc. But as in the example the rest of the year will be based on £19,200 if you only earn £17,433 again then next year your award will be based on that.