drop in income and working tax credits.

stephbond89

Cause of the way his work pay him, his annual taxable income is only 12k or so. He has only earned £5k up to November this yr, so he would ave to earn over £2k a month from now til April to get it to even £12k, he earns around £1500 pre tax now he is back on his normal hours, thats 4 paydays before April, only another £3k or so onto the 5k!!! Its very strange we dont quite understand it ourselves, he gets untaxed wages which make up his earnings for travel allowance and expenses like food and drink. we thought they were diddling the tax, but we checked and its all legit!!!

So he is still only going to be getting the £12k even though he is working around 60 hours a week!!!

KPR11

stephbond89 wrote: »

he earns around £1500 pre tax now he is back on his normal hours, thats 4 paydays before April, only another £3k

He pays 50% in tax? Something does not quite add up - the current max tax rate (inc NIC) is 41%. So I am not quite sure how he can only be earning c£750 net on a £1,500 gross salary.

You would have to be earning a max of £10,275 (gross) pa to end up with £750 pm (net).

£1,500 pm (gross) should result in a take home of c£1,195.

How exactly do you survive in terms or housing, travel, food etc?

stephbond89

Whoops sorry! I messed up there, I meant £6k!!!!!! lol, he pays around 20% in tax as far as I can gather! Sorry I messed up a bit there dont know how i did that!!! So anyway thats still only £11k for the year. If it starts looking klike he is going to get more than the £12k I have estimated, I will phone the tax credits straight back up and amend it!!

He gets £10 per shift for expenses and £9.60 per shift for travel allowance (for petrol and all the car stuff!) he isnt taxed on this, and so it works out he gets around £4.50 an hour in actual taxed wages, and £6.20 all in all an hour.

As I say it sounded to me like they were diddling the tax somewhere, but I did check and its all legit.

KPR11

stephbond89 wrote: »

Whoops sorry! I messed up there, I meant £6k!!!!!! lol, he pays around 20% in tax as far as I can gather! Sorry I messed up a bit there dont know how i did that!!! So anyway thats still only £11k for the year. If it starts looking klike he is going to get more than the £12k I have estimated, I will phone the tax credits straight back up and amend it!!

He gets £10 per shift for expenses and £9.60 per shift for travel allowance (for petrol and all the car stuff!) he isnt taxed on this, and so it works out he gets around £4.50 an hour in actual taxed wages, and £6.20 all in all an hour.

As I say it sounded to me like they were diddling the tax somewhere, but I did check and its all legit.

So he earnt £625 pm (gross) for the first 8 months of the year?

stephbond89

well his annual gross is £5600 i think no more than £6k I know that.

This is taking into account two of the months he had ALOT of time off due to me having a baby and been quite poorly before. One of the months he only did 3 shifts the rest was holiday.

It will average out at around £750 a month TAXABLE per month, but around £1200 - £1400 take home.

KPR11

stephbond89 wrote: »

well his annual gross is £5600 i think no more than £6k I know that.

This is taking into account two of the months he had ALOT of time off due to me having a baby and been quite poorly before. One of the months he only did 3 shifts the rest was holiday.

It will average out at around £750 a month TAXABLE per month, but around £1200 - £1400 take home.

I can't really understand the calculation as he would have had to have had at least 4 full months off.

I guess you know the numbers better than I do.

Good luck

limpy-jim

Remember it is the pay before tax that you have to declare for Tax Credits purposes.

flea72

stephbond89 wrote: »

As I say it sounded to me like they were diddling the tax somewhere, but I did check and its all legit.

It may be legit for income tax purposes, but where tax credits are concerned, benefits in kind have a value and therefore have to be declared as part of your income

F

skibadee

Don't understand this as a quick approx calculation on entitledto.com on earnings of £12000 in your situation came out as entitled to approx £100 a wk combined TC and CTC??????????????

also 12k over 60 hours works out less than £4 an hr??? thats much below the minimum wage?????

stephbond89

the income we are asked to give is that which is on our P60 right?? Well last yr this was £16869, and going on the payslip at the bottom of the page it says "Pay to date: £5800" or whatever it is, this is our Taxable pay to date, and what would appear on the P60 in April, I have gone through all of this with myu husband and his company, I dont want to to be doing something illegal to the tax- they're not "benefits", its untaxable on his wages, and used for travel, its like expenses, if he was working on a Jury, and had £500 for the week in expenses, he wouldnt have to declare that as "income" as it is expenses, just as this extra is on his wages. Its done to ensure the guards are getting enough money to live off without them having to pay them more bascially. Its all very very confusing, we dont understand it fully- all I wanted to know was if it would go up or down (our WTC) because I have told them of his drop in wages and what we expect our income to be for this year, but I think Ill just wait and see from the tax credit people as I am getting more and more confused lol.

I am going to call them about my husbands wages and make sure we#'re not been over paid, last thing I want is a huge bill at the end of the year saying we owe £5000 to them or something! x