Tax credits mistake?

aymal

Hi there

I'm after some advice please.

I'm a single parent to a 14 month old.

Last year I earned about £10,000 and was on statutory maternity pay for about 32 weeks in the tax year 11/12. The tax credits I received were based on my current circumstances at that time.

Tax year 12/13 I am back at work working 37 hours and I expect to earn about £31,800.

I have no child care cost. I pay into a work pension which is about £3600 per year.

I have given the tax credits office details of what I will be earning for the tax year 12/13 and the award notice states that I will be getting about £100 a month. Surely thats not correct? I thought the threshold was £26,000 for one child.

Should I be calling them back to tell them they've made a mistake?

Thanks in advance for any help.

Two4Tuesday

There is a 10K disregard on your higher income for 12/13, meaning that they will ignore the first £10,000 and treat your income for 2012/13 as £21,800.

Shiloe

Two4Tuesday wrote: »

There is a 10K disregard on your higher income for 12/13, meaning that they will ignore the first £10,000 and treat your income for 2012/13 as £21,800.

Hmm not quite sure thats the case the £10,000 disregard is if your income will be up to £10,000 higher this tax year from last you dont have to tell them but if its £10,000 or more of a difference you have to tell them so in the posters case she would have to tell them

System

Two4Tuesday is correct - see point 4 in this excerpt from HMRC's Tax Credit Manual

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM07042.htm

aymal

I have read the link you provided and its sounds like youre correct.

I have called them and told them my expected income for this tax year. I just didn't expect to get anything. This makes it clearer to me. I just didn't want to end up owing them anything if they had made a mistake.

Thank you all for your responses.

bikeman

I am currently in the throes of trying to stop HMRC taking me to court for tax credit overpayments and the following info may help you.

My earnings varied over 3 years by less than the allowable income disregard each year.

On every occasion when my earnings increased I telephoned tax credits office, advised them of the increase and queried why my payments weren't reduced - on several occasions the notfied change actually triggered an additional payment. I was told numerous times that payments don't change immediately in order to provide some transitional relief - even though my expected earnings were rising not falling. They never mentioned the income disregard but I believe this was the reason why my TCs weren't stopping.

The income disregard was raised to £25k in 2007 by demands from the opposition when HMRC were taking 000's to court who had been innocently over paid by HMRCs incompetencies.

Now the s**ts are in power they are using austerity measures and the backlash against anyone claiming any benefit, to start reducing the income disregard and target the recovery of tax credits overpayments again.

Even the tax credits office doesn't understand the income disregard with many of them thinking that it is only there to smooth out payments when income changes and that if you're overpaid they will get it back.

This is not the case, if you advsed the TCO of changes to your income in good faith you could rightly have expected them to pay you the correct amount and you owe nothing.

If you are threatened with revovery of a tax credits overpayment you should complete a 'Request to Reconsider Recovery of Overpayment' (RRR) form, also called a TC846' and follow the process at http://taxcc.org/dispute1.htm

The law in the UK allows HMRC to get county court judgements on the flimsiest of evidence so make sure they at least follow their own rules and demand that the income disregard be taken into account and used to negate your overpayment.