Disregard 25k or 10k

ticktactoe

i ve had a letter in regards to yearend tax figures 2010-2011 there is a different between my figures and there figures as they used wrong income will they use the disregard ? they have my year end as just over 17k but it was actually 36k ?

zagfles

If the figures are wrong you need to tell them. The disregard applies to income increases from one year to the next, not to mistakes!

ticktactoe

Hi Zagfles thanks for your reply i have indeed informed them and am awaiting amended figures was just wondering what the overpayment would be as stated they used 17k instead of 36k im hoping they will amended current award to reflex this however my income for this year is 24k lower than last year i have four kids two which are in childcare so i hope as this is a mistake they will only take a percentage as have child care and rent to pay a week .

zagfles

What was your income in 2009-10? The disregard may apply.

For this year if your income is lower than last year you can give them an estimate and they'll pay you based on that rather than last year's actual. But don't underestimate or there will be an overpayment.

ticktactoe

Hi 2009-2010 income was 16k unsure of how the error happened as updated if new circumstances happen i can really do without a hugh overpayment if an overpayment is applied do you know if they stop current award or do they take a percentage

zagfles

So..
2009-10 income was £16k
2010-11 income was £34k (but they got that wrong and put it down as £17k)
2011-12 income will be £12k

In which case you should be OK as the one-off high income year should make no difference.
The disregard will be applied to your increase in income last year so 2010-11 will be assessed on an income of £16k.
This year, normally they'll start off paying you based on last year's actual but if you phone to tell then your income will be £12k, then they'll pay you based on that. Note that if you tell them £12k and actually earn more there WILL be an overpayment, so over-estimate if you're unsure.

ticktactoe

sorry 2011-12 income will be 24k thank you will keep you posted on the outcome

zagfles

ticktactoe wrote: »

sorry 2011-12 income will be 24k

OK in which case there won't be an overpayment last tax year, but there will for the first part of this tax year as they're paying you on an income of £17k when it should be £24k.

ticktactoe

do you think they will reduce future payments ? thanks again for your help will keep you updated

zagfles

ticktactoe wrote: »

do you think they will reduce future payments ? thanks again for your help will keep you updated

They'll definitely reduce future payments. They won't ask for a lump sum (not yet anyway) as it's an in-year overpayment. You'll probably find your tax credits reduced substaintially this year as you'll have been overpaid for the first part of the year.