Tax Credits and extra income?

debsjt

I am a single working Mum with two young children and I am struggling to understand the tax credits system. My salary is approx £600pm and my tax credits £800pm. I am trying to improve my families financial situation by looking at getting a second job. However from previous experience if I earn an extra £100pm, my tax credits will be reduced by £100pm. Please could someone explain if this is correct?
I would be very grateful if anyone could help me understand how this works as at I feel that I am trapped and have no way of improving my financial situation.

wannabedebtfree_2

It doesn't work quite like that, but you can play around with different amounts on:

http://www.turn2us.org.uk/benefits_search.aspx

to see what difference it makes.

Once you have put your basic details in you can flick back and forwards to the income page and change it without having to start the whole thing again.

zagfles

No, tax credits reduce by 41% as gross income increases, this makes 73% when tax & NI are added so every extra £100 you earn gets you an extra £27. BUT there's a year's delay because of the disregard, so for the first year any increase in income up to £10k will be disregarded, so won't affect your tax credits till next year.