Quick tax credit question

kst101

I started getting CTC and WTC last April when XH and I separated. I gave my 2010/2011 figures of about £8,500 and have been getting CTC and WTC.

As some of my work is self employed I have only just been checking over my figures for 2011/2012 and looks like I have earned about £14,000. Have been trying to call HMRC but after two attempts of hanging on and then being cut off have decided to try again later.

Am I right in thinking that with the £10,000 disregard that my payments should stay at the same level for this year, although they will decrease for 2013/14? Or will they go down immediately? My first payment for this financial year is due next week and according to my award letter should be slightly higher than for 2011/12 so I can see I need to get in touch sooner rather than later to avoid too much of an overpayment, if there is one.

zagfles

No, the disregard applies to increases in the current year, not previous year. So you won't have an overpayment for 2011/12, but you will have overpayments this year until the renewal is processed, or you tell them about your increased income last year. As a rough guide about £40-45 per week of your WTC payments after 6 April will be overpayments.

kst101

Thank you - will brave the tax credits helpline later on. Looks like most of my WTC will go then but seeing as I have been earning more that is fair enough

kst101

Managed to get through to hmrc this morning and found out I couldn't update my 2011/12 figures as we are now in 2012/13 so have given those figures as an estimate for 2012/13. For future years, as soon as I know roughly what I will earn during a tax year should I update HMRC? Feel rather daft to not have realised I needed to do it sooner but as my working is seasonal for several different employed and self employed work I hadn't quite realised how it had all added up.

Also need to hope I don't earn less this year than last year; more specifically up to £2,500 less but there's not much I can do about that rather than try to get more work I suppose!

What does happen when you receive an overpayment as I am due a payment next week which will be about £200 too much, having looked at online calculators. Will all my payments be reduced further from their new level to take it into account or can I make a one off payment to clear it? Really do feel silly about this now.

zagfles

kst101 wrote: »

Managed to get through to hmrc this morning and found out I couldn't update my 2011/12 figures as we are now in 2012/13 so have given those figures as an estimate for 2012/13. For future years, as soon as I know roughly what I will earn during a tax year should I update HMRC? Feel rather daft to not have realised I needed to do it sooner but as my working is seasonal for several different employed and self employed work I hadn't quite realised how it had all added up.

Also need to hope I don't earn less this year than last year; more specifically up to £2,500 less but there's not much I can do about that rather than try to get more work I suppose!

What does happen when you receive an overpayment as I am due a payment next week which will be about £200 too much, having looked at online calculators. Will all my payments be reduced further from their new level to take it into account or can I make a one off payment to clear it? Really do feel silly about this now.

Yes your payments for the rest of the year (after the renewal) will be reduced. So it's not a big deal if you're aware - basically you'll just get paid some of your WTC in advance, ao you could just put £200pm aside and use that for the rest of the year depending how you budget.

For the future - it's probably best to phone them towards the end of the tax year and give them an estimate. Phone them earlier if you think your income will go up or down by more than the disregard, as that will affect the current year. The disregard is currently £10,000 for rises and £2500 for drops. In 2013/14 the disregard for rises is £5000.