WTC disregard question

zagfles

lilibet1 wrote: »

am i right in saying that if you tell ctc/wtc that your income for 2011/12 is going to be approx 15,000 am i right in thinking it can go up by 10,000 to 25,000 and not make a difference to my payments?

No. This is not correct at all, the disregard applies to the difference between actual income in one tax year and the next. Not between what you tell them and what you actually earn.

Otherwise everyone would just tell them they're going to earn £10k less than they expect.

If your income last year was £15k then this year's can be up to £25k without affecting your tax credits.

lilibet1

oh knew i wasnt getting the hang of this. So for example if last years income was 20,000 does it mean that it could go upto 30,000 this year without notifying them. Please dont shout if im getting this wrong.

zagfles

lilibet1 wrote: »

oh knew i wasnt getting the hang of this. So for example if last years income was 20,000 does it mean that it could go upto 30,000 this year without notifying them. Please dont shout if im getting this wrong.

That's right (though best to tell them so they get payments from April 2012 right - but it won't affect this year's).

BUT - if last year's was £20,000, and you tell them this year's is going to be £15,000, but you end up earning more than £15,000, then there will be an overpayment. Because the disregard only applies to the increase over and above last tax year. Not over and above your estimate.

lilibet1

thanks, i understand now