Worried Working Tax Credit and Overpayment

bublemad

Hello all, am a newbie here but have been a 'lurker' for some time and have always got very valuable information, so thankyou.

My query is relating to me and OH's working tax credit renewal. My OH is self employed so his income was estimated at £10,000 and I get Contribution based ESA so a total, with estimate of £15,618.

However we have just had another estimate from our accountant to say OH's figure will be more like £16,000, so a total of £21,618. I rang TC's today who have worried the life out of me and said we should not have received any tax credits for 2011/12 and would have to pay it all back but that I would probably not hear until late August.

I am off work with depression and anxiety at the moment and this really hasn't helped at all.

My question today is, isn't there a £10,000 disregard amount or something like that? I did ask the gentleman I spoke to today about it but he said this was not the case.

Any help would be greatly appreciated, thankyou in advance

nannytone_2

the 10k disregard is for income changes between one year and the next. not for an estimayed and an actial income within the same tax year.

Icequeen99

As Nannytone says, the disregard only applies to income between two years.

What was your combined income in 2010/11?

If your estimate turns out to be too low, then you will have an overpayment. That is why it is always better to estimate higher than you think. But from what you have said it does appear HMRC are right.

IQ

bublemad

Thankyou for your reply.

There is a change between one year and the next, only we have to estimate it because my OH is self employed.
2010/11 - £9836
2011/12 - £16,000 but estimated as per previous year at £10,000,

So an increase of £6,000 on previous year and our estimate.

bublemad

Thankyou again for your reply.

Im not sure of exact figures for 2010/11 for joint but I think it was about £15,000, this year being £21,618.

Icequeen99

Ok, so that changes things slightly. Normally, when people give estimates, they do so because their income falls.

So when you gave your first estimate, your award should still have been based on your 10/11 income. Then when you gave your actual 11/12 income, it probably still should be based on 10/11 as the rise is less than 10,000.

If I understand you, you are saying your 10/11 income was around £15k and your 11/12 will be around 21k. So in that case there should be no overpayment.

There may be an overpayment of the payments you have had since April this year though because your 12/13 award will be based on 21k.

IQ

bublemad

Thankyou IQ, you've put my mind slightly at rest.

You're right 10/11 income around 15k and 11/12 around 21k. I was thinking that we would need to pay back this years payments from April but the guy from the TC office seemed to think it was all of last years also.
I can now wait for the revised details with slight less worry.

Thankyou again.