childcare from tax credits - is this right??

MissMoneypenny

lkmc01 wrote: »

So the conclusion is there is no point in me working unless I leave my partner and son.

Well that's one way of looking at it. The other is that:-

• You will be working to pay more towards you own family, instead of asking the welfare state to pay a large chunk towards the cost of your child.
• Your wages will go up and welfare will go down, as the state can't afford to keep paying the huge welfare bill - the UK now has a 1 trillion pound debt.
• When you no longer need tax credits (which are welfare payments), you won't have to jump through all sorts of hoops to get welfare. You and your OH will be in charge of your own lives again.

Kimitatsu

zagfles wrote: »

That's a common misunderstanding. There is no "limit" in tax credits, it's the threshold at which the family element (usually) starts being withdrawn which has been cut from £50k to £40k. That won't affect the OP at all (as their income is under £40k).

It is perfectly possible to get childcare help on incomes much higher than £40k, with 4 kids and 300pw childcare the limit is about £70k!!

No I realise that just didnt want to confuse the OP any further

OP given the current economic climate would you not be better to get a job offer on the table before trying to work out if it is worth it? Currently you are assuming that your child will have to be in child care full time without looking at the possibilities of flexible working or working part time.

Unfortunately the reality is that for many working parents it is better to look at those options than to rely on tax credits to help fund child care. You dont mention if you have experience in your field of work, although you are patently highly qualified. You may be better off, looking at a job which pays less if you do not have a massive amount of experience but will benefit you by giving you a wider remit in the long run.

Just a thought since you are obviously frustrated at not being able to get work, but the reality is that there are many many very experienced people in the job market at the moment.

lkmc01

Can someone please tell me what we may get from tax credits in black and white if we had a household income of 35000, 36000, 37000, 38000, 39000, 40000, 41000, 42000, 43000, 44000 or 45000 with 100 a week childcare for one child. I can't make sense of the previous posts

Kimitatsu

Go to the website listed in the above posts at turn2us and put in your income for LAST year that is 2010-2011 (April to April)

Then you can put in your projected income for this year and see what difference it makes - none of us have the time to do it all for you!

Failing that make an appointment to see your local CAB and ask for a better off calculation based on all of your figures - they will have an appointment where they can take the time to go through all of it with you.

lkmc01

If I put in last years pay and this years pay now I agree it would allow us more tax credits this year, but the problem will come next year when both the previous years (this year) and the current (next years) income levels are higher. Can someone clarify that we would only be able to get 545 if our household income was 35000 next year based on this years rate

Kalia

Perhaps you would be best worrying about next year next year. Your child will be at school, perhaps with after school clubs, you could get flexible working and find that you need very little if any childcare. In the mean time you could save the money you would be earning.

What everyone on this thread has been saying is that yes, the calculator is usually accurate but remember that you can earn up to 10k more this year and it will be disregarded.

If you'd like to see amounts in table form then this leaflet is handy http://www.hmrc.gov.uk/leaflets/wtc2.pdf P20 shows tax and working tax credits combined. To be honest I have no idea how the childcare bit is worked out and I don't know of any links showing how it is.

From your posts I gather it is taking a long time to get a job. This is a completely imaginary situation as far as I am aware but if we imagine that tax credits are cut for those earning over 20k in a few years and you had decided against getting a job because you wouldn't see much return from it you would find yourself in a situation with no job, a reduction in income, trying to explain in interviews why you have waited several years after qualifying to get a job while up against more people for the jobs as other parents find themselves in the same position. In your circumstance I would look for jobs closer to home (£50 a week for travel sounds like a lot to me so perhpas somewhere closer) and working part time in school hours so you only need child care in the holidays.

Kimitatsu

lkmc01 wrote: »

If I put in last years pay and this years pay now I agree it would allow us more tax credits this year, but the problem will come next year when both the previous years (this year) and the current (next years) income levels are higher. Can someone clarify that we would only be able to get 545 if our household income was 35000 next year based on this years rate

Unfortunately that is one of the major flaws of tax credits in that they always produce an overpayment. The tax credits are worked out on this years family circumstance but last years income, so yes you will get more this year and then possibly have to make a small overpayment back next year.

On the current legislation as it stands then yes you are correct BUT there are two budgets between now and next year and there will be the introduction of the single credit to replace all means tested benefit in 2013.

GobbledyGook

OP if you go onto the HMRC website they have a calculator for working out tax credits. In my (limited) experience it seems to be the most accurate and will tell you what you will likely get.

lkmc01

After school clubs were charging a fiver an hour!!

lkmc01

The close to home jobs are £50 a week in petrol. There is nothing in the local area, under a 1hr drive. The far away jobs involve moving