WTC and CTC income change question - help!

Worryguts

Hi all

I am about to change jobs and my income will effectively halve from 22k to 12k ish.

My first question is when I inform the Tax credits office of this change will our payments be increased immediately?

Secondly and I'm not sure that this would affect any increase in payments, we have been claiming tax credits since April 2009 with our first years payments being based on an income of 9k for the tax year 2008/2009. Earnings for 2009/2010 were 20k or so and for the last year our payments have obviously been vastly reduced. So, if our payments are increased now due to halving of income, what will happen in April given that our earnings for the tax year will still be 18k or so yet at the time of renewal we will only be earning 12k or so?

Sorry if I haven't made this clear! Would appreciate any help.

Thanks

zagfles

Tell them, your payments will increase this year. There's a disregard for income increases (25k this year and 10k next).

Worryguts

zagfles wrote: »

Tell them, your payments will increase this year. There's a disregard for income increases (25k this year and 10k next).

Thanks for the info; but what about next tax year (after April 2011), will my payments be based on the 18k or so we will have earned 10/11 or on the current earnings of 12k which we will be earning when we renew in April?

Thanks

zagfles

Worryguts wrote: »

Thanks for the info; but what about next tax year (after April 2011), will my payments be based on the 18k or so we will have earned 10/11 or on the current earnings of 12k which we will be earning when we renew in April?

Thanks

If you tell them you expect to earn 12k next tax year then they should use that income to base your tax credits on. They might initially base them on your actual earnings in the previous year (ie 18k) but if they do phone them and remind them of your current expected annual income.

Worryguts

zagfles wrote: »

If you tell them you expect to earn 12k next tax year then they should use that income to base your tax credits on. They might initially base them on your actual earnings in the previous year (ie 18k) but if they do phone them and remind them of your current expected annual income.

Thank you:) That puts my mind at rest a lot - much appreciated