Tax credit advice please - sudden drop in income

meds12_2

Good evening all, I hope you can furnish me with some advice as I can't seem to find what I need on the net.

My situation:
Basically my OH is almost certainly going to be sacked in 3 weeks time (minor H&S point, his fault though), which unfortunately coincides with my maternity pay going to solely SMP (roughly £125 per week before tax, NI and pension).

He will be starting his own business, but the money he needs to start (lease van, buy tools and stock, insurances, advertising, etc) will not be available until at least 4/5 weeks after he is fired (in current companies' sharesave scheme).

He will be paid for January, which will cover Feb's bills, but until we get his sharesave money (roughly end of Feb), we can't start the new business, and paying March's bills (most come out 1st), will be a problem.

"Get off your backside, you lazy moo" I'm sure you're thinking - and I have emailed work tonight to ask if I can take all my KIT days over Jan and Feb, with a view to going back end of March if needs be.

My question:
We currently have a tax credit (for 2 children) payout based on an estimated income for this financial year of £40k, however, how does it work if there is a sudden massive drop in income? I'd estimate our total income would still be fairly high - mid 30's, but our monthly income would have dropped like a stone - do they still use a yearly estimate, or do they take into account the new circumstances?

Apologies if this isn't very concise, thanks in advance for any replies.

MrsManda

As soon as you have confirmation about your OH's circumstances phone the tax credits helpline to report a change in income. They'll reassess and let you know.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/TaxCreditsandChildBenefit/TaxCredits/Keepingyourtaxcreditsuptodate/Changesthataffectyourtaxcredits/DG_173248

zagfles

Let them know but it is unlikely you'll get any more as as you say it's worked out on an annual basis and unless your annual income drops below about £30k you probably won't get more than the family element of £545 a year. Assuming no disabilities etc. But you'll get more from April, so tell them now anyway.

meds12_2

thanks for the speedy advice MrsManda, I will do that.

meds12_2

Thanks Zagfles, I thought not. We did overpay the mortgage a little so will have to fall back on that