Child tax credit and pay raise?

momer79

Hi,

Our gross household income is 25k and we have got 2 kids uder 5 yrs of age.

At the moment we are getting monthly £269.84 child tax credit. Now i have got a job offer of 30k so our household income will increase by 5k, in other sense i will be getting £283 more every month which sounds great but my child tax credit will go down to £50.28 per month.

I am really wondering if its worth taking 30k?

LL30

There's a 10K disregard in place, so a 5K increase won't affect you until next tax year

momer79

Is this true that there will be no child tax credit for people earning 30k or more from next year?

LL30

Not heard that one, but I'm by no means an authority on these things - there's so many changes a foot it's hard to keep up and I tend to home in on info that's pertinent to me.

ManicMum

Quick rough calculation based on what you have said would mean you will be about £2,500 better off plus the promotion so you would be crazy not to take it.

fannyanna

momer79 wrote: »

Hi,

Our gross household income is 25k and we have got 2 kids uder 5 yrs of age.

At the moment we are getting monthly £269.84 child tax credit. Now i have got a job offer of 30k so our household income will increase by 5k, in other sense i will be getting £283 more every month which sounds great but my child tax credit will go down to £50.28 per month.

I am really wondering if its worth taking 30k?

I may have missed something here as this seems very, very simple.

Taking the new job (even with the tax credit cut) would mean an extra £63.44 per month.

I'm confused why this is a difficult decision.

momer79

fannyanna wrote: »

I may have missed something here as this seems very, very simple.

Taking the new job (even with the tax credit cut) would mean an extra £63.44 per month.

I'm confused why this is a difficult decision.

How extra £63.44 per month?

tyllwyd

Current income £1613 + £269 = £1882

New income £1896 + £50 = £1946

£1946 - £1882 = £64 increase (approx)

momer79

Thanks alot for the heads-up.

But i think i will still be getting £269 till next year April even if i start this job now?

fannyanna

Perhaps you can save the extra £200 per month you'll be getting in the short term rather than increasing your outgoings as you'll find the sudden drop of £200 in April a shock to the system.

zagfles

momer79 wrote: »

Is this true that there will be no child tax credit for people earning 30k or more from next year?

No. The main change next year is that the family element won't be retained till income gets to £40k, it will be withdrawn (tapered) with the rest of tax credits.

The cut off point above which you don't get tax credits will vary depending on circumstances. With 1 child, no disabilities etc it'll be about £26k, with 2 about £32k, with 4 still well over £40k.