Out of curiosity, what is the earnings limit for claiming WTC?

zagfles

BrettMorganxD wrote: »

Ok. Does anyone else know if working tax credit informs your employer, because when I looked it up I couldn't find anything, but it states working tax is paid part of your pay packet. So im presuming your employer would be informed?

It used to be, it isn't any more.

BrettMorganxD

zagfles wrote: »

It used to be, it isn't any more.

So how is it paid now? same as any other benefit fortnightly in arrears :S?

caz2703

I have my WTC & CTC paid weekly but my child benefit monthly. I think you have the choice for when you wnat it paid but I'm not sure if it was for CB only. Not sure if it's arrears but when paid weekly I'm not sure it would make much difference. When I applied it was automatically backdated 3 months but it's since been amended as I declared that it was backdated too far so they're reclaiming 2 months though not sure how - think it's lower weekly payments.

BrettMorganxD

ok thanks caz

BrettMorganxD

caz2703 wrote: »

I have my WTC & CTC paid weekly but my child benefit monthly. I think you have the choice for when you wnat it paid but I'm not sure if it was for CB only. Not sure if it's arrears but when paid weekly I'm not sure it would make much difference. When I applied it was automatically backdated 3 months but it's since been amended as I declared that it was backdated too far so they're reclaiming 2 months though not sure how - think it's lower weekly payments.

And did tax credit people phone your employer and tell them you are now entitled to working tax credit?

mildred1978

Can't you ask the tax credit people all of these questions directly?

Firefox1975

mildred1978 wrote: »

Can't you ask the tax credit people all of these questions directly?

lol, yeah, if they wanted them to see there was something fishy going on!:rotfl:

caz2703

BrettMorganxD wrote: »

And did tax credit people phone your employer and tell them you are now entitled to working tax credit?

Not a clue as I haven't spoken to my employer since I phoned them and asked for some details so I could apply!

Why would it be an issue if HMRC contact your employer? My WTC (not currently eligible) and CTC are paid directly to my bank and don't go through work. I'm not sure if HMRC need to contact my employer to confirm anything as all my details would be available to the tax man.

BigAunty

Wouldn't someone who is single and in a NMW job earning close to the WTC threshold be better off working a bit of overtime rather than getting tax credits, or am I being naive?

Is this one of the grey areas which mean that the tax implications and benefit withdrawal rates means a person is in fact better off spending time on their sofa rather than at work?

Sixer

BigAunty wrote: »

Wouldn't someone who is single and in a NMW job earning close to the WTC threshold be better off working a bit of overtime rather than getting tax credits, or am I being naive?

Is this one of the grey areas which mean that the tax implications and benefit withdrawal rates means a person is in fact better off spending time on their sofa rather than at work?

Well, the withdrawal rate is 41% of gross pay. Gross pay is subject to 20% income tax and 12% NI. So of each £1 you earn, you'd actually see 27p. I must say, it doesn't look very inviting!

PS: I think UC's withdrawal rate is going to be 65% - so not much better than this 73%. I did read a big research paper about costings and incentives, which reckoned the optimal withdrawal rate for incentivising work was 55%. And I think IDS's poverty think tank was also recommending 55% before the 2010 election. But the cost was enormous.

PPS: ETA link to the IDS think tank recommending 55% - http://www.centreforsocialjustice.org.uk/default.asp?pageRef=382