Tax credits - can you refuse to give income estimate?

mrstiggywinkle_3

Hi, I gather from reading the forum that it is often best to have tax credits based on last year's income rather than an estimate so that you are protected by the income disregard.

This morning I rang to inform them of a change to our childcare and was asked for income estimates, to which i asked if it could not just be based on last year's income and was told "it's funny, sometimes it can be but sometimes it asks for it". I then said I would be happy for it to be based on last year's and he then started to manually enter last year's income as my estimate which isn't the same as not giving a new estimate is it? I then felt I should give a slight over-estimate of our income (off the top of my head, without doing the sums) to protect us from over payment so did this but not sure if that was the right thing to do. I think our income will only be a very small amount over last year so it shouldn't matter on thsi occasion, but can they push you into making an estimate in this way or could I have been more firm in refusing?

Sorry this is so long!

zagfles

No you don't have to give an estimate but it won't reduce your entitlement if you give one. You still get the disregard applied, eg if last year's income was £20k and you give an estimate of £25k this year, you'll still get tax credits based on £20k this year as the disregard will still apply.

Giving an estimate could stop you building up an overpayment from April. It's usually best to give them one if you can.

mrstiggywinkle_3

Thank you that's good to know - I msut have misunderstood what I thought I'd read about the disregard.