My sister is so worried about tax credits in April '12

moomoomama27

I can't help her as we don't claim, but basically she has had a letter today from HRMC stating she will no longer recieve CTC in April due to her income.

Her husband and hers joint income is/will be £30,500 joint. They have 3 children all under 16 wth no childcare costs.

Does anyone have any advice as to if this letter is correct (she can't get through to speak to an advisor today). Will she still get tax credits in April, and does anyone know how to work out how much (if anything) she will get?

I don't know what to suggest, it's just she's in a panic and I know there are some really helpful people on here!

Thanks in advance.

MissMoneypenny

Look at this thread
https://forums.moneysavingexpert.com/discussion/3789445

or this one
https://forums.moneysavingexpert.com/discussion/3793353

Pepzofio

Do they qualify for Working Tax Credits? I'm assuming they do based on that income.

Assuming they do work a minimum of 24 hours per week then they should get £2,612.20 a year, or £3402.20 if they work a combined minimum of 30 hours per week.

If they don't qualify for WTC then unfortunately no, they won't get any CTC based on that income.

moomoomama27

Pepzofio wrote: »

Do they qualify for Working Tax Credits? I'm assuming they do based on that income.

Assuming they do work a minimum of 24 hours per week then they should get £2,612.20 a year, or £3402.20 if they work a combined minimum of 30 hours per week.

If they don't qualify for WTC then unfortunately no, they won't get any CTC based on that income.

No they don't get working tax credits, just the CTC.

He works more than 30 hours I think she works about 12-15 hours a week.

They have 3 children. So according to a few posts I've seen the income level is £38k+ ? They will earn £30.5k.

So they won't be eligible then?

shedboy94

Pepzofio wrote: »

Do they qualify for Working Tax Credits? I'm assuming they do based on that income.

Assuming they do work a minimum of 24 hours per week then they should get £2,612.20 a year, or £3402.20 if they work a combined minimum of 30 hours per week.

If they don't qualify for WTC then unfortunately no, they won't get any CTC based on that income.

I'm sorry......what???
Do you actually know what you are talking about??
Where did you get these figures from bearing in mind the OP stated a HH inc of £30500??

Murgatroyd21

Don't know how Pepzofio worked out the figures, but I get it to be £65pw ctc from April if it's £30500 used as the income, about £57pw if it's based on £31500.

Meant to say, she should call and advise them she doesn't want the claim withdrawn.

Icequeen99

It is most likely that HMRC do not have an up to date income figure for your Sister, hence why she was sent the letter.

As someone has already given you links to other discussions on this, in summary the letter is wrong as the income cut-off is not £26,000. For some it will be just over £23,000, for others like your sister much higher.

Everyone has a different cut-off based on their circumstances, but HMRC select people for the letters based on the latest income figure held on their system. If your income has fallen you should contact them.

IQ

zagfles

moomoomama27 wrote: »

No they don't get working tax credits, just the CTC.

He works more than 30 hours I think she works about 12-15 hours a week.

They have 3 children. So according to a few posts I've seen the income level is £38k+ ? They will earn £30.5k.

So they won't be eligible then?

Yes they definitely will be eligible. The income level of £38k+ is the income above which they wouldn't be eligible, they are well below.

As a matter of interest, has their income dropped a lot since last tax year? Because it's a bit worrying if HMRC are sending these letters to people who are well below the threshold.

Pepzofio

shedboy94 wrote: »

I'm sorry......what???
Do you actually know what you are talking about??
Where did you get these figures from bearing in mind the OP stated a HH inc of £30500??

Errrrm.... Yes thanks!

Based on 2012 rates for a couple with 3 children, no disabilities, working 30+ hrs per week, no childcare...

WTC
Basic Element £1920
Couple Element £1950
30 Hour Element £790 = £4660 Max WTC award

CTC
Family Element £545
Child Element (3 @ £2690) £8070 = £8615 Max CTC award

Household Income £30500
Less First Threshold (£6420) = £24080
41% Taper = £9872.80 withdrawal rate

£9872.80 (WR) - £4660 (WTC) = £5212.80 WR remaining, therefore no WTC.

£5212.80 (rem WR) - £8615 (CTC) = -£3402.20, therefore £3402.20 CTC awarded, or approx £65/wk as murgatroyd21 stated.

moomoomama27 wrote: »

No they don't get working tax credits, just the CTC.

He works more than 30 hours I think she works about 12-15 hours a week.

Sorry, should have clarified - even though they don't receive any WTC, doesn't mean they don't qualify for it.

If they satisfy the qualifying conditions then their max award is higher due to them getting the additional WTC allowances (or 'elements'). 41% of any 'surplus' income they have (ie above £6420pa) is offset against their max awards is a specific order (WTC, childcare, then CTC) to arrive at the actual award.

Dunroamin

Are they repaying any arrears?

moomoomama27

Dunroamin wrote: »

Are they repaying any arrears?

No no arrears just will be a fairly straightforward claim, perhaps a small rise in income from last year, but not above or below the disregard!

Many thanks to all who have posted, you've been a great help, and put her mind at rest!