Tax credits initial/final award?

caz246

Looking for some help from people who are clued up on tax credits.

The turn2us calculator shows this (below) when I put in my details for this year.

We get about £32 monthly at the moment. Our 2012/2013 income will increase by around £22,000 (due to maternity leave & my partner in unemployment 2011/2012).

Will we get a payment at the end of the financial year? Or due to our income increasing will it work itself out for next years payments? Still struggling to get my head round tax credits so any help appreciated.

Period:06/04/2011-05/04/2012

Period:06/04/2011-05/04/2012

annual £

weekly £

Initial Tax Credit award for period:

£545.34

£10.43

Working Tax Credit:

£0.00

£0.00

Child Tax Credit:

£545.34

£10.43

Final Tax Credit award for period:

£7,405.72

£141.64

Working Tax Credit:

£4,302.04

£82.28

Child Tax Credit award:

£3,103.68

£59.36

Mrs_Arcanum

For one child the new family threshold for Child Tax credits is £26,000 for one child & I think £35,000 for two. If your income will increase so much, you will in all likelihood get no tax credits or child tax credits for 2012/13. Our notification has already said they will be looking at 2011/12 to see if we have been over paid.

You may get Tax Credits this year based on last years income, but if you do you may possibly have to pay it all back as they are trying to work on current incomes rather than previous years.

caz246

Mrs_Arcanum wrote: »

For one child the new family threshold for Child Tax credits is £26,000 for one child & I think £35,000 for two. If your income will increase so much, you will in all likelihood get no tax credits or child tax credits for 2012/13.

Sorry I should have said we will be paying £205.00 per week childcare, surely this would make a difference?

Mrs_Arcanum

caz246 wrote: »

Sorry I should have said we will be paying £205.00 per week childcare, surely this would make a difference?

Not sure about the new allowances for child care (not been something I have had to do).

Found this which seems to indicate how much child care costs can be claimed by income (Max entitlement is 70% of £175 for one child and so on depending on number of children).

zagfles

I presume your 2010/11 income was much higher, and you didn't tell them about the drop in income in 2011/12?

If so then yes you should get a lump sum payment on renewal.

Your initial award for 2012/13 will be based on your 2011/12 actual - so if your 2012/13 income is going to be £22000 higher then tell them straight away. The first £10,000 of the increase will be disregarded.

If you have eligible childcare ignore the income limits you see quoted all over the place, they don't apply to you. With childcare the income limits are MUCH higher.

caz246

zagfles wrote: »

I presume your 2010/11 income was much higher, and you didn't tell them about the drop in income in 2011/12?

If so then yes you should get a lump sum payment on renewal.

Your initial award for 2012/13 will be based on your 2011/12 actual - so if your 2012/13 income is going to be £22000 higher then tell them straight away. The first £10,000 of the increase will be disregarded.

If you have eligible childcare ignore the income limits you see quoted all over the place, they don't apply to you. With childcare the income limits are MUCH higher.

2010/2011 income was roughly £32,000. 11/12 will be roughly £11,000, then 12/13 roughly £33,000. I have called tax credits roughly 3 times to tell them of change of circumstances (when my SMP stopped etc) our award actually went down by £10! do you think I should call them again?

zagfles

caz246 wrote: »

2010/2011 income was roughly £32,000. 11/12 will be roughly £11,000, then 12/13 roughly £33,000. I have called tax credits roughly 3 times to tell them of change of circumstances (when my SMP stopped etc) our award actually went down by £10! do you think I should call them again?

Did you get an "extra" payment (this is probably the reason for payments going down).

But it sounds like they didn't record your lower income, on £11,000 this year you're definitely entitled to CTC in full and WTC if you're working (maternity leave counts as working). Turn2us is usually correct.

You can tell them if you want and you'll get higher payments for the rest of the tax year but they won't backdate the underpayment now - you'll get this as a lump sum when you renew.

But make sure you tell them about your increase in income next year because otherwise you'll be overpaid - next year they'll initially pay you based on £11,000 - when they should be paying you based on £23,000 (£33,000 minus the disregard). But with childcare costs you'll still get quite a bit in tax credits next year.

caz246

zagfles wrote: »

Did you get an "extra" payment (this is probably the reason for payments going down).

But it sounds like they didn't record your lower income, on £11,000 this year you're definitely entitled to CTC in full and WTC if you're working (maternity leave counts as working). Turn2us is usually correct.

You can tell them if you want and you'll get higher payments for the rest of the tax year but they won't backdate the underpayment now - you'll get this as a lump sum when you renew.

But make sure you tell them about your increase in income next year because otherwise you'll be overpaid - next year they'll initially pay you based on £11,000 - when they should be paying you based on £23,000 (£33,000 minus the disregard). But with childcare costs you'll still get quite a bit in tax credits next year.

Thank you so much for your help. I have just called tax credits and given them my exact income figure for this year (straight from my last payslip) and as I was on maternity for 37 weeks this tax year £3700 was taken from the £11000. We will receive a new award notice in the next few days. I will give my new estimated income for bnext year when I go back to work in March to ensure no overpayments, this is what I am very worried about.

So am I right in believing that according to the calculator figures we are 'owed' around £5000????? If so I am in complete shock, especially since things have been very tight and we could have been getting more each month.

PS I did not receive any extra payments.

zagfles

caz246 wrote: »

Thank you so much for your help. I have just called tax credits and given them my exact income figure for this year (straight from my last payslip) and as I was on maternity for 37 weeks this tax year £3700 was taken from the £11000. We will receive a new award notice in the next few days. I will give my new estimated income for bnext year when I go back to work in March to ensure no overpayments, this is what I am very worried about.

So am I right in believing that according to the calculator figures we are 'owed' around £5000????? If so I am in complete shock, especially since things have been very tight and we could have been getting more each month.

PS I did not receive any extra payments.

Yes - if you've only been getting the family element (about £40 a month) but your income is only £11,000 this year then you will have a very big underpayment. But you'll have to wait for most of it till after you renew, your award will show a "potential payment" which they'll release after you renew.

When you say your "exact" income figure for this year did you include your earnings for the rest of the tax year, ie if you return to work in March anything you get paid in March counts in this tax year, and your partner's earnings up till the end of the tax year?

But don't worry - even if your estimate is a little low it just means the lump sum you'll get on renewal will be a little less, you are still owed several thousand! Enjoy!

caz246

zagfles wrote: »

Yes - if you've only been getting the family element (about £40 a month) but your income is only £11,000 this year then you will have a very big underpayment. But you'll have to wait for most of it till after you renew, your award will show a "potential payment" which they'll release after you renew.

When you say your "exact" income figure for this year did you include your earnings for the rest of the tax year, ie if you return to work in March anything you get paid in March counts in this tax year, and your partner's earnings up till the end of the tax year?

But don't worry - even if your estimate is a little low it just means the lump sum you'll get on renewal will be a little less, you are still owed several thousand! Enjoy!

Yes I included the salary I'll receive at end March and partners potential income between now and April. I'm actually in shock that we are going to be due this money! Desperatly need a new family car so it will be put to good use

Kyresa

caz246 wrote: »

Thank you so much for your help. I have just called tax credits and given them my exact income figure for this year (straight from my last payslip) and as I was on maternity for 37 weeks this tax year £3700 was taken from the £11000. We will receive a new award notice in the next few days. I will give my new estimated income for bnext year when I go back to work in March to ensure no overpayments, this is what I am very worried about.

So am I right in believing that according to the calculator figures we are 'owed' around £5000????? If so I am in complete shock, especially since things have been very tight and we could have been getting more each month.

PS I did not receive any extra payments.

Next year you won't be able to do this with the new rules and not allowing people to change for a whole year :mad: