Working Tax Credits income disregard question

carbonara

Try as I might I just cannot work out how this works. They couldn't have made tax credits anymore complicated if they tried.

Basically I'm currently unemployed on JSA but I start my new job on Monday. My earnings for the 09/10 tax year were just £2957 which, according to the tax credit calculator, entitles me to around £1000 in Working Tax credit between Monday coming and the end of the tax year.

However I estimate that my earnings between when I start work and the end of the tax year, including JSA already claimed will come to around £12000. Does this mean I could claim Working Tax Credit only to have to pay it all back once I've confirmed my earnings for the 10/11 tax year making it pointless making a claim or does the income disregard make it ok to claim?

Also, should I notify them straight away of the estimated increase in earnings or wait until the renewal?

Any help greatly appreciated.

flea72

when you move from JSA to working, they usually base entitlement on estimated income for the current tax year, rather than income from the previous tax year - although the 25k disregard does still come into play

also entitlement isnt backdated. so although you are entitled to WTC based on your proposed income, you dont get the years worth of money, you will get what remains of this tax year, so roughly 4m worth - with a yearly income of £10k you get £1.3k WTC a year, so roughly £450 between now and april

hth F

carbonara

Thanks for the reply. I'm still confused though, even more in fact. How can the income disregard come into play if the current years estimated income is used? Surely an income disregard is only relevant when comparing 2 years income?