Have I received massive overpayment??-CTC

ZsaZsa

Please help- Im in a huge panic that I've been overpaid CTC for 2010-2011

My husband is self-employed so we have to give estimated figures at renewal time. For 2010-2011 we estimated our income to be approx £32,000 (all for him, I didn't think I'd be working), and this was based on our previous years income. This gave us £41 /month CTC

However, we have just heard back from our accountant and his actual income was £20,000, and mine was £2,400 for a little bit of work I did for him. I phoned the tax credits dept last week with this info

I've just checked my account this morning and I've received a payment of £2,600:eek:. This changes last years payments from £41/month to approx £255/month!! This cant be right can it?? (i was expecting it to be maybe an additional £10/month at most)

We have no savings, other income, benefits (other than child benefit), and our children are 1 and 3years

Im so scared of spending this money then having to pay it back. I wont touch it til Im sure, but it would help us out massively if this is correct

TIA

Caz3121

It does not look too wrong actually - this table shows roughly the amount of tax credits payable and it looks like the delta could be correct

http://www.hmrc.gov.uk/taxcredits/people-advise-others/entitlement-tables/work-and-child/work-no-childcosts.htm

ZsaZsa

Caz3121 wrote: »

It does not look too wrong actually - this table shows roughly the amount of tax credits payable and it looks like the delta could be correct

http://www.hmrc.gov.uk/taxcredits/people-advise-others/entitlement-tables/work-and-child/work-no-childcosts.htm

Wow thank you. Have just looked at the table and it looks like it could be right. Hopefully there will be more info in my letter when it arrrives.

Thank you for taking the time to reply

2sides2everystory

Agreed. It does not look too wrong

There are sometimes compensations to being part of the self-employed backbone that will grow the UK back out of recession if anyone will

Do remember however that if your declared incomes are as up and down as the UK economy that you really ought now to start to budget for HMRC possibly having now started overpaying you at too high a rate for the current year if they are now using that low 2010/11 actual income figure as an estimate for 2011/12 too. 2010/11 is now done and dusted (thank you very much Mr Taxman - yes it really is my money - Yay!) but if you know in your heart of hearts that THIS YEAR they've now adjusted the estimate down a bit low, then no worries, the cash each month is better in your pocket than theirs but when they tot up next year, you may have to pay back some of this year's if business has actually already picked up again.

So just like putting money away to pay that tax bill that inevitably follows good years, if you expect business to recover or if it already has recovered, you might need to put that windfall away just in case in a year's time they are reducing your payments again and going further than back down to £41 a month in 2012/13 - by this time next year they might take it to zero AND be asking for a lump sum back against the total they ended up paying in 2011/12!

Nevertheless good luck for a good year in 2011/12 and beyond!

PS Don't forget that in the year a kid reaches age 16 before 31st August (I think that date is right ... ) then from 1st September that year, HMRC will stop paying a tax credit for that kid unless you make a deliberate point at that time of telling them that the kid is continuing in education.

ZsaZsa

2sides2everystory wrote: »

Agreed. It does not look too wrong

There are sometimes compensations to being part of the self-employed backbone that will grow the UK back out of recession if anyone will

Do remember however that if your declared incomes are as up and down as the UK economy that you really ought now to start to budget for HMRC possibly having now started overpaying you at too high a rate for the current year if they are now using that low 2010/11 actual income figure as an estimate for 2011/12 too. 2010/11 is now done and dusted (thank you very much Mr Taxman) but if you know in your heart of hearts that THIS YEAR they've now adjusted the estimate down a bit low, then no worries, the cash each month is better in your pocket than theirs but when they tot up next year, you may have to pay back some of this year's if business has actually already picked up again.

So just like putting money away to pay that tax bill that inevitably follows good years, if you expect business to recover or if it already has recovered, you might need to put that windfall away just in case in a year's time they are reducing your payments again and going further than back down to £41 a month in 2012/13 - by this time next year they might take it to zero AND be asking for a lump sum back against the total they ended up paying in 2011/12!

Nevertheless good luck for a good year in 2011/12 and beyond!

Thank , I had been wondering about this years payment. So far our year has been worse than last , but if things do pick up we'll definitely be in the next bracket (I'm hoping to go back to work too, although will only be a few hours a week). I think I'll stick to just drawing the £41 /month out of each months payment for this year, and then I've got a little bit extra at the end if I dont have to repay it.

it doesnt help that my husband has miscalculated his earnings the past few years. Now he's using an accountant he's realised that his profit is less than he thought. So not only was last year a quiet year, it was also much less than previously just from being worked out properly!!