How do I decipher tax credits??!!

jmc250781

Hi,

I'm 25 weeks pregnant, and desperately trying to understand the tax credit system. Both my partner and myself currently work, though my contract is fixed term and finishes at the end of November and I'm due at the start of December. So, I can claim SMP. What I'm trying to figure out is the tax credits? As they're based on last years earnings it seems I won't qualify for anything, though my income will have reduced substantially. I've heard that you can be reassessed if your earnings drop, but that they will reassess me based on this years earnings (Apr 2010-Apr 2011), which would still be far more than I'd be receiving once I'm out of work.

I'm wondering is there some way I can make it clear to the tax credit people that although I used to earn a good enough salary I haven't saved anything and would like to be assessed based on the fact that as of December I will only have SMP and child benefit as an income? Although will this only result in me paying back anything claimed the following year (from April 2011). Even next year when I'm off I will supposedly still be assessed on the previous years earnings and it looks like the government are cutting all tax credits so I'm not sure that we'll be able to claim anything.

My partner earns 29k, but together we have no savings and I'm really worried about how we're going to get by once I stop work.

I've tried talking to CAB, who say I can only put in my earnings for the current year which will be an overestimate based on my income from December, as I've worked from April to December. I've tried to get hold of the tax credit people on the phone but constantly get cut off.

Sorry if that's all a bit garbled- just really worried and would like some advice about how to get around this seemingly impossible system.

Many thanks.

Caz3121

Tax credits work on the annual income so your options will be to open the claim using last years income then call them and give them an estimate of this years.

You will not be able to use your husbands income only, it will be his + your earnings to date.
There is no £25k disregard if you do it this way so you should overestimate as anything at the end of the tax year that is over the figure you give will result in an overpayment.

mitchaa

On the tax credits pack, you will declare your P60 earnings for 09/10 along with your partners.

They will also ask for an estimate of 10/11 earnings so that will be your husbands full wage, with what you have already earned upto that date. You are allowed to deduct £100pw for every week that you have been getting SMP/MA.

With a £29k income, even without you earning a penny, you would still only get the basic award of £545pa.

debtfreenewbie

All you can do is inform them of your situation. They are currently doing security procedures so it is taking longer to take calls.
You have time to sort it out, so dont panic everything will fall into place.