tax credits disregard help

georgina32

Hi everyone,

I wonder if anyone can help. I currently receive working tax credits with the disability premium and a little unsure about the disregard.

I setup an online business working from home in Jan 11.

I made £3000 profit for the tax year 10/11.

I got awarded about £100/wk tax credits, based on the 3k I earnt.

I understand that tax credits start to reduce after about £6400 and my disregard is £10k. Please correct me if i'm wrong!


My question is, At what income level for this tax year would I start to have to pay tax credits back?

I'm thinking maybe it would be £16400? the 10k disregard plus the cut off point?

Thanks so much to anyone who can help

Georgina

kris1893

Yes, if your income is below the first withdrawal rate (£6400) then your award would only start to reduce when the income goes above the £16,400 mark. However, if your income is set to increase this tax year it is best to notify them anyway (before April 2012) so that any provisional payments you receive from April 2012 to when the annual declaration is completed are roughly correct.

georgina32

ah yes, i hadn't thought about that. Thanks for the help kris!