Earnt more money than they estimated

Horsepower

Hi just doing tc renewal. They estimated our income for year (we didn't do estimate as never know how it will go on self employed). We have received 12k more than they estimated. What will happen?

Mara69

You'll have an overpayment. This may negate any award you might get this year.

Horsepower

What about the 10k disregard? How does that work?

Horsepower

Can anyone help please?

zagfles

The first £10k increase over the previous year is disregarded - so if your income went up £12k you'll have an overpayment but it won't be massive, maybe about £800.

But your payments in this new tax year will be based on your higher income so your payments from April could be very significantly higher than you're entitled to - bear this in mind. You'll have a big drop after renewal.

Horsepower

Thank you so much. We received £3800 based on our income of £26600 so presume we will need to pay back around a third of this? I saved every penny they gave us anyway just in case

hazelbunny

I thought the disregard didn't apply to estimates only to actual income.

Icequeen99

hazelbunny wrote: »

I thought the disregard didn't apply to estimates only to actual income.

As long as the estimate is above previous year income, the disregard applies.

OP - TCO don't do estimates, so the figure used must be one you provided or it is previous year income. If you didn't provide the figure, then you are supposed to check the award notice and let HMRC know if the figure held is wrong.

IQ

Horsepower

I did it by post so have never spoken to anyone so basically they set the figure which appears to be a little over what our income was last year

Horsepower

I just looked at the award and they are using last year income.