Child Tax Credit-what income figure? So confused...

beammeup101

Hi,

In 2011/12 we got the basic rate of £545 or thereabouts as we were well under the income threshold, so all was well.

I am so confused this year. Our taxable income as on our P60, means that we are still eligible. But do we have to add on:

(1) the cash equivalent of childcare vouchers (salary sacrifice through my husbands payroll). The helpline say yes it counts as income, but the HMRC website says no, ignore it.

(2) pension contributions - these are taken from our gross pay and are not taxed or taxable.

I think by adding these on it means we are not eligible this year. The helpline cant seem to tell me what to do, they say "ask your employer" - but I dont know what I'm supposed to be asking!

Anyone, please help. Do they want the gross taxable pay, or are we supposed to add these extra things on?

maria777_2

I am no longer entitled to them but used to get the basic award - the figure I always gave for renewal was the taxable pay figure off my P60 which was my pay minus pension contributions and a salary sacrifice payment for a car lease ( I presume the child care vouchers would be salary sacrifice also)...so yes, deduct your pension payments and child care vouchers - but they should already be deducted for your P60 taxable pay figure anyway

beammeup101

Thanks for your reply. I'll try and get through on their phone line this week. So confusing!

Murgatroyd21

beammeup101 wrote: »

Hi,

In 2011/12 we got the basic rate of £545 or thereabouts as we were well under the income threshold, so all was well.

I am so confused this year. Our taxable income as on our P60, means that we are still eligible. But do we have to add on:

(1) the cash equivalent of childcare vouchers (salary sacrifice through my husbands payroll). The helpline say yes it counts as income, but the HMRC website says no, ignore it.

(2) pension contributions - these are taken from our gross pay and are not taxed or taxable.

I think by adding these on it means we are not eligible this year. The helpline cant seem to tell me what to do, they say "ask your employer" - but I dont know what I'm supposed to be asking!

Anyone, please help. Do they want the gross taxable pay, or are we supposed to add these extra things on?

For vouchers, reduce your P60 income by the amount spent on vouchers - i.e. if income was £20,000 and vouchers cost you £5000, declare £15,000. (Remember you can't claim help for childcare covered by vouchers, so if total childcare was £10,000 and vouchers were £5,000, you could only submit a claim for £5,000 costs).

Check with your pay department, but usually if it's the company scheme you can't make further deductions. On the other hand, if you make payments to a private scheme outside your employer scheme, those can be deducted.

zagfles

Murgatroyd21 wrote: »

For vouchers, reduce your P60 income by the amount spent on vouchers - i.e. if income was £20,000 and vouchers cost you £5000, declare £15,000. (Remember you can't claim help for childcare covered by vouchers, so if total childcare was £10,000 and vouchers were £5,000, you could only submit a claim for £5,000 costs).

Check with your pay department, but usually if it's the company scheme you can't make further deductions. On the other hand, if you make payments to a private scheme outside your employer scheme, those can be deducted.

The vouchers and pension conts are already deducted from the P60 income and the OP wanted to know whether they needed to be added on again.

OP - the answer is definitely NO you don't need to add them. Just declare your P60 income. The helpline told you rubbish, the website is correct.

Icequeen99

Agree with Zagfles - you don't need to add either of the things you mention back on.

But as Murgatroyd said, make sure you deduct the value of the vouchers from the amount of childcare you declare.

IQ

beammeup101

Brilliant brilliant, thank you so much.

I don't think I need to declare childcare costs. I think my husband earns too much for it to be relevant (about £35k - we still get some of the basic tax credits because we have 3 kids).

I have just found a part time job which only just covers the childcare (leaves about £1 per day after travel). Should I make a claim for this childcare? I am presuming that due to my husbands salary, I won't get any help (also because the job is part time and I will not pay tax as i will earn under the threshold of £8000).

zagfles

beammeup101 wrote: »

Brilliant brilliant, thank you so much.

I don't think I need to declare childcare costs. I think my husband earns too much for it to be relevant (about £35k - we still get some of the basic tax credits because we have 3 kids).

I have just found a part time job which only just covers the childcare (leaves about £1 per day after travel). Should I make a claim for this childcare? I am presuming that due to my husbands salary, I won't get any help (also because the job is part time and I will not pay tax as i will earn under the threshold of £8000).

Yes, you should claim it (assuming you work 16+ hours otherwise you're not eligible) but as per above you need to deduct the amount your husband gets in vouchers. For instance if your childcare is £100pw and your husband gets £55pw in vouchers then you can only claim £45pw through tax credits. You'll get 70% of this - it'll show up as an increase to CTC due to the way the taper works.

Note that your extra income won't reduce tax credits this year because of the £10k disregard, but expect a big drop next year (April 2013) if everything stays the same.

Murgatroyd21

zagfles wrote: »

The vouchers and pension conts are already deducted from the P60 income and the OP wanted to know whether they needed to be added on again.

Where does the OP say that?

If sounds as if the OP sees a total gross income figure then deductions for pension and vouchers, and is trying to work out whether to give the figure after deductions rather than the gross, as the HMRC website advises on income to be disregarded for Tax Credit purposes. Without seeing the P60, it can only be assumed and the OP hasn't made it clear.

zagfles

Murgatroyd21 wrote: »

Where does the OP say that?

If sounds as if the OP sees a total gross income figure then deductions for pension and vouchers, and is trying to work out whether to give the figure after deductions rather than the gross, as the HMRC website advises on income to be disregarded for Tax Credit purposes. Without seeing the P60, it can only be assumed and the OP hasn't made it clear.

The OP was perfectly clear. See the bold bits:

Our taxable income as on our P60, means that we are still eligible. But do we have to add on:

(1) the cash equivalent of childcare vouchers (salary sacrifice through my husbands payroll). The helpline say yes it counts as income, but the HMRC website says no, ignore it.

(2) pension contributions - these are taken from our gross pay and are not taxed or taxable.

I think by adding these on it means we are not eligible this year.

It is clear from the above that the vouchers and pension conts are already deducted from the P60, and the OP was asking if they needed adding back on. They don't.

Murgatroyd21

zagfles wrote: »

The OP was perfectly clear. See the bold bits:


It is clear from the above that the vouchers and pension conts are already deducted from the P60, and the OP was asking if they needed adding back on. They don't.

Your lack of ability to understand is your problem. It's a bloody good job you don't work there.