Disregard help

Lovelamour

Our tax credits are based on last years income of one self employed wage and one part-time employed wage. We havent given a guesstimate for this year, cos we didnt know what it would be. Basically my partner has earnt about 8k more than last year. Someone told me this means they wont claim back the tax credits payments we have received this year as we are covered under a disregard? Obviously our payments will change from April though. On our tc form it says if your income goes up this wont normally effect the payments you are currently receiving.

Anyone able to advise?

Lovelamour

Anyone????

Lovelamour

67 views and no-one is able to help me????

pandaspot

Sorry I haven't a clue, didn't want to read and run

Hope someone can help. Maybe change your title? I thought this was about disreagards used in calculating housing/council tax benefit lol

no-oneknowsme

Im by no means an expert on this but i will give you my opinion.

A rise of £8k is quite a lot , Come renewal time which is just after April 5th , your provisional payments (which you receive from 5th April until your actual award is worked out - which can be anything up to 6 weeks+ ), are going to be based on last years income .

Tco will have no idea about the extra £8k you have received and so I would say that you are going to build up an over payment once April comes.....

If this were me then I would contact tco now to inform them . This will mean that your provisional payments will be more accurate and the over payment will be minimised. Your current payments will be adjusted immediately.

As i say , this is just what I would do as no-one wants an over payment......

There are others with more tax credit knowledge (Pam17 , Zagfles , DanE2010 to name but a few) so hopefully one of them will see your post and offer you sound advice.

Lovelamour

I am aware of that part (i.e. that come April we will be buiding overpayment until new figures are sorted) but I will keep all teh money to give them. But what i am asking is will we have to pay back any of the money we have received this tax year? Cos we were told payments received this year are based on last years income.........

MadameCholet

We are in a similar position but we are not self employed.

As I understand it, in my situation, providing the figures we gave them to calculate this years award were off our P60's and not estimated we will have any increase up to £25,000 disregarded for the current financial year.

If the figures had been estimates then we'd have ended up with an overpayment.

Lovelamour

But my partner doesnt have a P60 as he is se. So they based it on last years income......

zagfles

MadameCholet wrote: »

We are in a similar position but we are not self employed.

As I understand it, in my situation, providing the figures we gave them to calculate this years award were off our P60's and not estimated we will have any increase up to £25,000 disregarded for the current financial year.

If the figures had been estimates then we'd have ended up with an overpayment.

Yes, although it depends what the estimate was. The disregard applies to the difference in actual income between last tax year and this.

For instance if last year's actual income was 30k, but you phone them gave them an estimate for this year of 28k, but end up actually earning 40k, then there's be an overpayment but only a small one - as the 10k actual difference between last year and this is disregarded, but the additional 2k isn't.

If you had estimated 32k then there would be no overpayment (you would get correctly paid on 30k income)

Lovelamour

zagfles wrote: »

Yes, although it depends what the estimate was. The disregard applies to the difference in actual income between last tax year and this.

For instance if last year's actual income was 30k, but you phone them gave them an estimate for this year of 28k, but end up actually earning 40k, then there's be an overpayment but only a small one - as the 10k actual difference between last year and this is disregarded, but the additional 2k isn't.

If you had estimated 32k then there would be no overpayment (you would get correctly paid on 30k income)

So if we estimated 19k (although we didnt estimate TC said they based this years entitlement on this figure as thats what we earnt last year )and receive 27k in income does the disregard apply to us?

zagfles

Lovelamour wrote: »

So if we estimated 19k (although we didnt estimate TC said they based this years entitlement on this figure as thats what we earnt last year )and receive 27k in income does the disregard apply to us?

Yes. 19k was your actual income last year, 27k this year, so there's no overpayment. There's no estimate involved, TC work by using last year's income unless you give them an estimate.

Estimates are where your income changes and you phone to tell them, and they can increase (or reduce) your payments. Disregards obviously aren't going to apply to estimates otherwise everyone would phone them with a low estimate!