help please? redundancy and tax credits?

apesxx

hi, could do with a little advice please, OH was made redundant at the end of march,there were a few job possibilities but nothing has come of any of them. should i now ring up the tax credits and re-apply for them? last yr OH earned around £20k and me £8.5k. his redundancy pay hasnt come through yet so we are starting to struggle a bit. is it best to ring up or just wait for the renewal pack to come through? have never been through this before so really dont know what to do. what happens if he thenfinds ajob in a few weeks? will it screw up my tax credits for the rest of the year? any help appreciated thanks x

NoBS_2

The problem when people are made redundant is they typically estimate their income as nil or very little.

You have a disregard of 10k but say he goes back to work and earns £20k then you are immediately in an overpayment situation.

It is always best to overestimate than under because it's much better HMRC are owe you money at the end of the year than the other way around. I know this is difficult if you can't know when he will return to work so personally I would wait which gives you time to see how things pan out.

How much is his redundancy and do you know if he will be taxed on it? If he has not had it yet then it means it will be paid in this new current tax year and if he pays tax on it then that income would have to be in with any future income he might earn this year, even though it was for last tax year.

apesxx

hi, his redundany is around £2700 which is statutory redundancy and tax free and he is also owed 7 weeks notice pay which is around the same as his redundancy entitlement but will have job seekers and tax deducted from it. thanks for your help, i will just sit tight then and wait to see how the next few weeks turn out x

NoBS_2

apesxx wrote: »

hi, his redundany is around £2700 which is statutory redundancy and tax free and he is also owed 7 weeks notice pay which is around the same as his redundancy entitlement but will have job seekers and tax deducted from it. thanks for your help, i will just sit tight then and wait to see how the next few weeks turn out x

Well good luck, I hope he finds something. At least the redundancy won't be counted which is good so you would only have to consider any income he might earn. If he receives contributions based JSA that is taxable so that's something to consider, but the helpline will give you advice about what to include when the time comes.