Child tax credit limit reduced to £26,000

Murgatroyd21

zagfles wrote: »

No, it says "and HMRC thinks they earn £35,000 a year". Not that they actually will earn £35,000 this year. The tax year isn't over yet so a lot of people won't know what their income will be, particularly the self-employed. Other people will not report income drops in-year because if you do, and your income increases again, you can end up with an overpayment even if you tell them on time.

In both these cases, HMRC will assume they earn what they did in 2010/11 plus inflation. If that's not right, and it has dropped to £30k in 2011/12, there will be entitlement from April.

In any case, even if it does drop to £30k next year from £35k this year, it's still well worth keeping the claim open, for two reasons - in case it drops further (won't take much of a drop - about £300) and also because if everything stays the same, there will be entitlement in April 2013.

I accept you are reading the article and getting a different impression than me. Doesn't make you right though, we can all copy/paste excerpts limiting the information to support our own viewpoint. To continue "HMRC thinks they earn £35,000 a year, that would make them genuinely ineligible and would rightly get this letter."

It then goes on to say "if that income fell to £30,000, they would be entitled to a payout" I don't see any qualifying details that it is only if it falls to this figure in the 2011/12 year. Hence the potential for confusion.

zagfles

Murgatroyd21 wrote: »

I accept you are reading the article and getting a different impression than me. Doesn't make you right though, we can all copy/paste excerpts limiting the information to support our own viewpoint. To continue "HMRC thinks they earn £35,000 a year, that would make them genuinely ineligible and would rightly get this letter."

It then goes on to say "if that income fell to £30,000, they would be entitled to a payout" I don't see any qualifying details that it is only if it falls to this figure in the 2011/12 year. Hence the potential for confusion.

Yes. But you wrote "No, they wouldn't be entitled in this scenario!!!" without any qualification about the tax year of the fall either!

So yes the article could have been worded better, but it's a fairly pedantic point anyway - nobody can know exactly how much they're going to earn in a tax year which hasn't even started yet - if they think it'll be about £30k in 2012/13 it's well worth leaving the claim open regardless in case it's a bit lower, and to get payments from April 2013 if not.

But someone in this situation who believed the letter and the incorrect £26k limit could let their claim lapse.

stevepett

After years of aggravation, I finally decided that the nightmare of dealing with the HMRC department handling this just wasn't worth while.

So at the age of 61, I have decided that - though every mistake has been HMRCs - the time taken arguing with them and claiming benefit is not time well spent. So for the next 10 years, I will be repaying money that I don't owe HMRC, on the basis that I can earn more in the time saved than it will cost me.

HMRC has no understanding of the way business works, and seems not to wish to understand.

If you are in business or self employed, stay away from Working Families Tax Credit if you value your sanity.

Icequeen99

zagfles wrote: »

Yes. But you wrote "No, they wouldn't be entitled in this scenario!!!" without any qualification about the tax year of the fall either!

So yes the article could have been worded better, but it's a fairly pedantic point anyway - nobody can know exactly how much they're going to earn in a tax year which hasn't even started yet - if they think it'll be about £30k in 2012/13 it's well worth leaving the claim open regardless in case it's a bit lower, and to get payments from April 2013 if not.

But someone in this situation who believed the letter and the incorrect £26k limit could let their claim lapse.

On a different point, I think that Murgatroyd is right about MSE using a bad example. The article suggests, and indeed is slanted towards the fact that some people may have received this letter incorrectly. Chriswales is used as the example.

if you look back on this thread, I actually asked him about his PY circumstances and he admitted that his income was higher last year and that his earnings for this year would be lower. So he does still have entitlement, and so was right to receive a letter because HMRC don't know his income has fallen.

So, although the letter is completely wrong re the limits, MSE have focused on a case highlighting that someone has received the letter incorrectly when they haven't.

Also, the article by MSE suggests that you can give your actual figure when you get the s.17 notice and 'continue to get credits'. That is incorrect as well. For the people who get the letters, their s.17 notice will only finalise 11-12. Even if they report an income for 11-12 that would have given them entitlement in 12-13 it will be too late for the claim to be renewed if they didn't contact HMRC by 31 March to stay in the system.

It's a shame that the opportunity to correct the record accurately has not been taken. I hope people are not misled into waiting until they get their review form to tell HMRC of their income if it is lower this year, they need to stay in the system before 31 March.

IQ

zagfles

Icequeen99 wrote: »

On a different point, I think that Murgatroyd is right about MSE using a bad example. The article suggests, and indeed is slanted towards the fact that some people may have received this letter incorrectly. Chriswales is used as the example.

if you look back on this thread, I actually asked him about his PY circumstances and he admitted that his income was higher last year and that his earnings for this year would be lower. So he does still have entitlement, and so was right to receive a letter because HMRC don't know his income has fallen.

So, although the letter is completely wrong re the limits, MSE have focused on a case highlighting that someone has received the letter incorrectly when they haven't.

Yes, I saw that, but there have been a few examples of people whose incomes haven't fallen (gone up in fact) who've had the letter, as we discussed in the other thread. stjman for example.

Also, the article by MSE suggests that you can give your actual figure when you get the s.17 notice and 'continue to get credits'. That is incorrect as well. For the people who get the letters, their s.17 notice will only finalise 11-12. Even if they report an income for 11-12 that would have given them entitlement in 12-13 it will be too late for the claim to be renewed if they didn't contact HMRC by 31 March to stay in the system.

It would appear though, that this is what MSE were told by HMRC:

HMRC says if a claimant is taken out of the tax credits system they will receive an S17 form next month, which shows the recipient the income HMRC believes they earn.

The form then asks families to inform HMRC as soon as possible if that figure is wrong, which may mean they will continue to receive credits.

They are certainly reporting what HMRC told them in the first paragraph, and would seem to be quoting them in the second too although not entirely clear.

Or do you think, due to this error, HMRC will delay closing peoples' claims until they have the S17?

It's a shame that the opportunity to correct the record accurately has not been taken. I hope people are not misled into waiting until they get their review form to tell HMRC of their income if it is lower this year, they need to stay in the system before 31 March.

IQ

Yes, I'm not really sure whether it's MSE's fault or HMRCs. HMRC seem to have made the same mistake again (ie assuming one child) if they've been accurately quoted by this article:

From April, HMRC says child tax credit recipients get can get up to £7,375 each year, though only families with a child who has a disability will get anywhere near that figure. Most get up to about £3,000 a year.

Err, no that again is only if they have one child (single child element plus disability elements plus family element).

Icequeen99

I couldn't decide whether it was a quote from HMRC or whether someone at MSE had not understood the letter fully (where it referred to the s17 notice) and were linking it back to HMRC because it was in the letter.

I appreciate there might have been other people who received it in error, but i would think they are the minority and we don't know for sure of the facts. MSE could have picked a proper example. I just feel the article would be better focusing on why people should stay in (in case of a later change) than on people who might have got the letter in error.

I suspect the number of people who stay in will be very low. Not HMRC at its best that's for sure, especially when they come down so hard on people who make mistakes.

IQ

roundthetwist

I have just been reading through some of the post and find it shocking that people go on about people who receive beneifits spending it on holiday i-phones etc. My partner works and we receive tax credits. We try and have some sort of holiday each year and we have a computor and a car. We do that by simply being good with our money and only buying what we can afford when we can afford it. We have a reasonable priced holiday and pay for it over the year.
I know some people who dont work and receive benefits and have absolutey nothing, No car holiday etc and yet other people who receive the same beneifits seem to manange. I think it comes down to planning and budgeting

Anubis_2

gillybean129 wrote: »

No she's definately not thinking of dance as a career, it's just something she enjoys and helps to keep fit, and it will add to UCAS one day

It will mean diddly squat for UCAS if dance isn't her chosen subject....