Child Tax Credit and Season Ticket Loan - HELP!

tonicx8471

Can anyone help please? we have just recieved our annual tax credits renewal and because my wife has earnings showing £28K on her P60 but her salary is only £19K and the rest is made up of a Season Ticket Loan the HMRC are going to take away over £100 a week from our child tax credits. My wife pays this loan monthly out of her salary but the HMRC do not want to accept this and are still stopping our tax credits. I myself am registered disabled and have no taxable income.

We have all the evidence from my wifes employer: wage slips, P11d and a letter from her company's payroll department to corroborate what we have told the HMRC.

What else can I do to get the tax credits at HMRC right?

Icequeen99

What is the P11d value of the loan?

IQ

tonicx8471

the value of the P11d is £7188. P60 says £28K but that includes the loan, overtime and any bonuses.

Icequeen99

Is that £7,100 the actual value of the loan?

The amount that should be included on the P11d is surely the interest difference
http://www.hmrc.gov.uk/manuals/eimanual/EIM26103.htm

Regardless, you need to file an appeal against the award notice where HMRC have used 28,000 if you think the figure is wrong.

Bonuses and Commission should be included.

Have a look at the TC600 claim form notes which tell you exactly which parts of the P11d should be taken into account. http://www.hmrc.gov.uk/forms/tc600-notes.pdf Pg 14

I'm fairly sure that taxable loans are not included for tax credits, but would need to look at the regulations to be sure. What box of the P11d is the amount?

I would suggest you contact https://www.taxaid.org.uk to get the correct answer.

IQ

tonicx8471

thanks for that will look into it asap. cheers IQ

skintandscared_2

Most people who work in London have season ticket loans from their firm which are deducted from their salary. I've done it for years, but it's never been deducted from my salary for any calculations for things such as mortgage, etc, so I'm not sure why it would be for CTC? It's still part of your wages - we have just chosen to spend it on a travel ticket so it's more of an interest-free "advance". If your wife chose to drive to work instead, she'd still receive the £28k and there would be no deduction for her season ticket loan. At the end of the day, it's up to you how far from work you choose to live (or vice versa) and the cost of travel to work isn't a deductible expense is it?

Icequeen99

skintandscared wrote: »

Most people who work in London have season ticket loans from their firm which are deducted from their salary. I've done it for years, but it's never been deducted from my salary for any calculations for things such as mortgage, etc, so I'm not sure why it would be for CTC? It's still part of your wages - we have just chosen to spend it on a travel ticket so it's more of an interest-free "advance". If your wife chose to drive to work instead, she'd still receive the £28k and there would be no deduction for her season ticket loan. At the end of the day, it's up to you how far from work you choose to live (or vice versa) and the cost of travel to work isn't a deductible expense is it?

But it sounds like you are talking about a salary sacrifice/advance of wages. The OP here is talking about an actual loan i.e. his wife is actually paying back the full amount of the loan and so if she didn't have it she wouldn't receive the 28k wages.

IQ

Dognobs

She is on a 28k a year. I have to pay to get to work that is all she is doing it is just the firm gives her the money up-frount.

princessdon

What would be her wages without the loan? Would she be paid £28K?

skintandscared_2

Icequeen99 wrote: »

But it sounds like you are talking about a salary sacrifice/advance of wages. The OP here is talking about an actual loan i.e. his wife is actually paying back the full amount of the loan and so if she didn't have it she wouldn't receive the 28k wages.

IQ

No, I'm not. When you need to buy an annual season ticket to travel to work, you are given an interest-free loan to buy the ticket. Then each month one-twelfth is taken from your wages to pay it back. Most London firms offer this to employees. It's not a salary sacrifice or an advance on wages, it's a one-year loan. I've been doing it for 26 years. But it's basically your travel costs, it's not something that reduces your salary! If the OP moved to, say, 5 minutes walk from his wife's workplace and she could walk to work she wouldn't need to utilise the loan but her overall SALARY would be exactly the same as it is now - £28k. What she chooses to spend that salary on (including travel costs to get to work) is up to her!

Everyone pays to get to work. Do you deduct the cost of your bus fares from your monthly wage, or the cost of petrol? No, nobody does. The "loan" business makes it sound like it's something else, but it's not. It's what London firms do as they realise that most employees commute in from outside London and an annual season ticket is a big help, so they loan the money to buy one. But essentially it's just your travel to work costs - it hasn't reduced the salary!

skintandscared_2

Dognobs wrote: »

She is on a 28k a year. I have to pay to get to work that is all she is doing it is just the firm gives her the money up-frount.

I had to "thank" your post as you managed to put in one sentence what I waffled in two paragraphs. I hope the puppy will forgive me