Tax Credits Advice

howie94

Hi all

For the year 2011-2012 i stated that id be earning £9100 i had my p60 through last week stating earnings of £3600.
Why the large some of difference i dont know, i contacted tax credits to renew over the phone to which they stated that i must await until i recieve my renewal pack ? Am i right to think that repayment for the 2011-2012 is in order or not ???

kind regards

[Deleted User]

I have just posted exactly the same question. I think so, I hope so, if someone replied I will let you know.

Icequeen99

It depends on what your 10/11 income was. You might be due some money back for 11/12.

However i'd be more worried about why there is such a big difference between 9100 and 3600. Did you only work part of the year?

IQ

[Deleted User]

IQ - Sorry I don't understand.

Surely it's a case of at renewal last year you stated X, the income turned out to be Z. So unless anything is owing from previous years, they simply take X remove and replace with Z, this then = a new award amount for the gone year. They then see what they have paid you and what they should have paid, refunding you the difference, that's what my readings says.

Effectively what you tell them this year will finalise last year, so if the figure you gave last year is not exactly the same as the actual this year there could be under/overpayments. The figure you give as the actual for this year will then be used to predict payments as of April this year. Correct?

Icequeen99

assj wrote: »

IQ - Sorry I don't understand.

Surely it's a case of at renewal last year you stated X, the income turned out to be Z. So unless anything is owing from previous years, they simply take X remove and replace with Z, this then = a new award amount for the gone year. They then see what they have paid you and what they should have paid, refunding you the difference, that's what my readings says.

Effectively what you tell them this year will finalise last year, so if the figure you gave last year is not exactly the same as the actual this year there could be under/overpayments. The figure you give as the actual for this year will then be used to predict payments as of April this year. Correct?

I'm not sure I fully understand your explanation, but I don't think you are right if I am reading it correctly. You seem to be saying that last year, when you renewed and gave your 10/11 figure, that is used to set your 11/12 award. Then you give them your actual 11/12 figure now which replaces the 10/11 figure and creates either an under or over payment. If that is what you are saying then it is incorrect.

The 11/12 award, which is what we are talking about here will be finalised using either 10/11 income or 11/12 actual income.

To work out which one, HMRC apply a series of tests which are:

1. If 11/12 is less than 10/11, then it will be 11/12 income used.

2. If 11/12 is greater than 10/11, but by less than 10,000, then 10/11 income is used.

3. If 11/12 is greater than 10/11 by more than 10,000, then 11/12 income is used minus 10,000.

What estimates have been given through the year are irrelevant, it is actual incomes that count for finalisation.

That is why I asked the OP what their actual 10/11 income was.

For finalising 12/13 claims, the above 3 rules will be different because there is a new disregard for falls in income of 2,500.

IQ

[Deleted User]

Ok yes, I understand.

So only if 11/12 income is less than 10/11 will my rule apply. The one I mad up lol.

I didn't take account of the three rules that you mentioned, to be honest I didn't know about them.

I'm just so grateful that my calculations have been correct "by pure luck", as I have a lower income in 11/12 than I did in 10/11.