Tax Credits Been Stopped, Advised I Will Owe £900+

hostable

Hi,

Last year I was 24 and unemployed for the entire tax year from April 6th until December 3rd when I started full-time employment. Anyway, when I turned 25 I investigated the tax-credit options available to me, and after going through the application process at the tax office and via post, it was confirmed that based on my income for last year (£4800 iirc), I was entitled to ~£2300 working tax credits (quite surprising, but there we go).

All the online calculators seem to confirm this, including the DWP's own calculator.

On 3rd June, I was laid off by previous employer as a result of cuts, and started another job on 15th June. During this period of unemplyment, I did not recieve "full" JSA, as there is a 4-week run-on for WTC. Because I got my new job within the 4-week period, I was able to retain the tax credits, without the need to re-apply.

Anyway, my old job was 30 hours and £675 per month or thereabouts. The new job is 40 hours and £950 per month (about £225 per week after tax) or thereabouts, so I telephone the tax office with my employers details, tax reference etc, and informed them of the new wage increase. I was informed that it should not affect the WTC as they are based on the previous tax year income only and my wage was under the threshold.

Anyway, yesterday morning, I recieved a letter, which makes very little sense but from what I can grasp, it is saying between the 38 day period of 25th May 2011 (when my application was processed/awarded) and 7th July I was entitled to £198 or thereabouts, but I had been paid £1114 (I have, but this has been paid at the rate of £52.03 per week upto 28th October), so I will likely owe £900 next year).

I checked my bank account, and my wages have gone in, but it looks like my tax credits have been stopped. Unfortunately I do not have the letter with me as of right now, but will have it when I get home in the morning.

Does anybody know if this sounds right, am I likely to have to pay £900 next year back to the government, or has there been a mistake? The online checker still reports £1103 due to me or similar when I checked a few mins ago (that is for the remainder of this tax year).

Obviously, £52 per week is a considerable amount to lose, but even worse if I have to pay back £900 I am very worried.

Any advice would be most appreciated. I will be telephoning the tax office in the morning to see if I can get an appointment at my local branch.

Thank you.

paddedjohn

why would you get tax credits while earning £225 per week?

hostable

I don't know, but that's what they have been paying me. When I spoke to the gentleman on the telephone, (at the point I telephoned with the new employer details, tax reference etc), he informed me it was based on the previous tax year income, and not the current one.

From what I could grasp, there is a threshold in place, after which you begin to lose x amount per x amount you earn. I think he calculated the most I could earn in this tax year would be around the 11k mark iirc.

They make the entire system as confusing as possible, and are obviously making big mistakes themselves, one way or another...

hostable

Just checked on entitledto.co.uk, put in higher amounts that actual for last years income (can't remember them exactly) and it confirms £51.87 which is just 16p short of the amount I was getting. It did not ask for this years income, and neither does the DWP checker.