Tax credits - income disregard?

emsiewoo

I received my final tax credits for 2009/2010 in the post this morning.

Everything is correct as per the details I gave them in my declaration, though I had to ring about an overpayment of £919.

My dh's income has gone up by £3000 on this years P60 - due to overtime, this fluctuates up and down yearly, until we receive his P60 we don't know what his income will be for the year.

My income remains the same - nil income on self employment, only set up in October last year, and probably won't take off until my eldest goes to school in September and I have more time to put into the business.

I understand our award will be reduced this year 2010/2011 due to the higher income, but was under the impression that there would be no overpayment for the previous year due to the £25,000 disregard.

According to the advisor I spoke to, because I rang in October to report my change of circumstances (moving from maternity leave - employed to self employed) they had recalculated the award then. Therefore we weren't entitled to the £25,000 disregard at the end of the award.

Does anyone know if this is correct? I know it probably is, but I'm just hoping that maybe the advisor got it wrong this time.

Emma

bestpud

Yes it's correct.

If you lower your estimated income and receive a higher award, you lose the disregard.

It has to be that way or everyone would call half way through the year and 'lower' their income in order to receive more money.

It is wise to keep a tally of your oh's earnings tbh.

flutterby_lil

What is the disregard, in simple terms please? Never heard of it.
Thanks

AGBAGB

I've just given my final declaration for 09/10, revising the end of year estimate I had to give in July.
Both are higher than my low original estimate that I have been paid TC for, due to me working my self employed socks off.

After the July estimate, I was informed of an overpayment. I asked "why the Income Disregard doesn't not apply?".

The Answer. "Because I have revised the income amount three times, or more"

In fact including the finalised declaration it's been 5 times.

I don't mind because I only want what is due to me, but it does seem a confusing fudge of rules to try and fathom out.

You are asked to check all figures and contact them if you think anything is wrong. It's impossible to do this when details of the rules aren't published!


PS. Don't forget to subtract Gross personal pension contributions, Gross Gift aid payments and first £300 of other income.

AGBAGB

Flutterby,
In simple terms: If your income has ended up higher than the income used to calculate your Tac Credit payments, You don't have to pay any back unless your income is £25000 higher. (first £25000 of additional income is disregarded)

Subject to rules that are there to stop potential abuse.