HMRC inaccurate letter

zippybungle

I have received the same letter.
I don't think we will be entitled to anything from April, but currently get the absolute minimum of £11.00 something per month.

Household income is approx £46k per year, have 3 young children. I work part time (28 hours) Husband is full time. I pay approx £101.00 per week in childcare.

Zippy x

zagfles

zippybungle wrote: »

I have received the same letter.
I don't think we will be entitled to anything from April, but currently get the absolute minimum of £11.00 something per month.

Household income is approx £46k per year, have 3 young children. I work part time (28 hours) Husband is full time. I pay approx £101.00 per week in childcare.

Zippy x

Actually based on the above you will be entitled to tax credits next year! Assuming your childcare is eligible and you claim it through tax credits. I make it about £60 a month, a bit more than last year as the child element has gone up.

Make sure you phone them to keep your claim open!! And please email your MP as above.

Murgatroyd21

zagfles wrote: »

Actually based on the above you will be entitled to tax credits next year! Assuming your childcare is eligible and you claim it through tax credits. I make it about £60 a month, a bit more than last year as the child element has gone up.

Make sure you phone them to keep your claim open!! And please email your MP as above.

Basic element £1920
Couple element £1950
30hr element £790
Family element £545
Child x 3 element £8070
Childcare @ 70% £3676

Total tax credit elements entitlement = £16951

Income £46000
After income threshold £6420 = £39580
x withdrawal rate @ 41% = £16227.80


Entitlement £16951 - Income £16227.80 = £723.20pa = £13.91pw (£55.63 4wkly)

Murgatroyd21

Hi, as shown above, some people may get the letter telling them they will have their award withdrawn unless they call. The reason this may be happening, even though you think you might still be entitled, may be the way TC estimates future year's income.

If you have an auto renewal case or you haven't changed income details in this year, tax credits can make a "guestimate" on your next year income based on an expected increase of the current year figure. This would potentially put some claims outside entitlement.

For example, the breakdown shown above of an income of £46000 with CC £101pw and 3 kids should have an ongoing entitlement. But, if TC apply an auto increase to the income (which is about 4.1%), it would become a no entitlement case as the income would be estimated at just under £50000!

It seems ridiculous to apply an increase of this amount when very few people are seeing any increases currently, but it may explain why you get a letter you don't expect.

springdreams

Murgatroyd21 wrote: »

Basic element £1920
Couple element £1950
30hr element £790
Family element £545
Child x 3 element £8070
Childcare @ 70% £3676

Total tax credit elements entitlement = £16951

Income £46000
After income threshold £6420 = £39580
x withdrawal rate @ 41% = £16227.80


Entitlement £16951 - Income £16227.80 = £723.20pa = £13.91pw (£55.63 4wkly)

I haven't got the dreaded letter ... yet.

However, I would like to know how you are working this out please.

I am a single parent with one child of 11. I do not receive child maintenance. I work full time and earn £33,500 pa and pay child care costs of £50 per week.

Thus far I have:

Basic element £1920
Lone parent element £1950
30hr element £790
Family element £545
Child x 1 element £2690

Total tax credit elements entitlement before childcare element = £7895

Childcare @ 70% £?? - what would this be for me. I don't think I qualify for 70%

Also, this bit confuses me - where does it factor in:

"First threshold for those entitled to Child Tax Credit only £15,860"

From here:

http://www.hmrc.gov.uk/rates/taxcredits.htm


Many thanks for any help working out whether or not I will still CTC.

zagfles

Murgatroyd21 wrote: »

Hi, as shown above, some people may get the letter telling them they will have their award withdrawn unless they call. The reason this may be happening, even though you think you might still be entitled, may be the way TC estimates future year's income.

If you have an auto renewal case or you haven't changed income details in this year, tax credits can make a "guestimate" on your next year income based on an expected increase of the current year figure. This would potentially put some claims outside entitlement.

For example, the breakdown shown above of an income of £46000 with CC £101pw and 3 kids should have an ongoing entitlement. But, if TC apply an auto increase to the income (which is about 4.1%), it would become a no entitlement case as the income would be estimated at just under £50000!

It seems ridiculous to apply an increase of this amount when very few people are seeing any increases currently, but it may explain why you get a letter you don't expect.

Thanks for the explaination. So they aren't writing to everyone on over £26,000, just borderline cases.

This would perhaps be fair enough if they were giving correct information in the letter. For instance, if they were saying (in zippybungle's case) "based on your current circumstances the income limit for getting tax credits is £47800, and we expect you to earn £50000".

But they aren't. They seem to be telling everyone that the income limit is £26,000.

So people like zippybungle and Wonderful100, if they trusted what they were told, would read the letter and think they're not entitled as they earn over £26,000, and let their claim lapse.

Equally, there may be people who know they will or may have a change of circumstances next year, for instance they are pregnant or one of them looks like losing their job. Even if they are currently above the income threshold now, by being told the threshold is £26,000 (rather than say £38,800 for 3 kids), they may let their claim lapse as they know their income won't drop below £26,000. But they may drop considerably below £38k and so be entitled to several thousand in tax credits.

I really hope HMRC have got plans to send out a corrected letter to everyone they've sent this letter to.

zagfles

springdreams wrote: »

I haven't got the dreaded letter ... yet.

However, I would like to know how you are working this out please.

I am a single parent with one child of 11. I do not receive child maintenance. I work full time and earn £33,500 pa and pay child care costs of £50 per week.

The bit that confuses me mostly is where does this factor in:

"First threshold for those entitled to Child Tax Credit only £15,860 £15,860"

From here:

http://www.hmrc.gov.uk/rates/taxcredits.htm


Many thanks for any help working out whether or not I will still get the £10 a week

Based on the above you won't get any tax credits next year, so you'll probably get the letter. But it may be worth keeping the claim open just in case your circumstances change and you become eligible, then you just need to call and tell them rather than reclaim.

The thresholds in the rates document refer to the income level at which tax credits start being tapered, rather than the income level above which tax credits stop. In your case, as you work, the one to use is the £6420 figure as you are "entitled" to WTC - though you don't get any because it's all tapered away.

springdreams

zagfles wrote: »

Based on the above you won't get any tax credits next year, so you'll probably get the letter. But it may be worth keeping the claim open just in case your circumstances change and you become eligible, then you just need to call and tell them rather than reclaim.

The thresholds in the rates document refer to the income level at which tax credits start being tapered, rather than the income level above which tax credits stop. In your case, as you work, the one to use is the £6420 figure as you are "entitled" to WTC - though you don't get any because it's all tapered away.

Many thanks for your help

Pinky15

Hi just thought I would share what Tax credits said to me. I phoned to let them know of a change to my working hours and my new PAYE number. He looked through my notes and said that just to let me know from April it looks like we will no longer be entitled to any tax credits. He asked how much he thought we would earn and I said about £31000. "Nope looks like your claim will be stopped unless you want to keep it open, as you earn too much and the amount it stops at is £26500'" Oh ok I said and left it there. Having said that we have 3 children and the information we have been given appears to be incorrect. He said to expect a letter in the post explaining why we will no longer be entitled?

zagfles

Pinky15 wrote: »

Hi just thought I would share what Tax credits said to me. I phoned to let them know of a change to my working hours and my new PAYE number. He looked through my notes and said that just to let me know from April it looks like we will no longer be entitled to any tax credits. He asked how much he thought we would earn and I said about £31000. "Nope looks like your claim will be stopped unless you want to keep it open, as you earn too much and the amount it stops at is £26500'" Oh ok I said and left it there. Having said that we have 3 children and the information we have been given appears to be incorrect. He said to expect a letter in the post explaining why we will no longer be entitled?

With 3 children the income limit is about £38,800 so you were told rubbish. You'll still be entitled from April.

Please let us know if you get the letter, because your case certainly isn't borderline...