Annual Income and Maximum Entitlements...

David333

I thought another thread might be suitable seeing as it's a completely different topic from what I have been asking in another thread...

When I put £9500 as our joint income into the HMRC calculator it claims that I would be entitled to £2304.59 in WTC.

However, on the charts at http://www.hmrc.gov.uk/taxcredits/people-advise-others/entitlement-tables/work-no-child.htm it says that those who are in a couple working over 30 hours and with a joint income of £9500 are entitled to £3405.

Can anyone explain the discrepancy?

(note, I understand that there is an income threshold and withdrawal rate of 41% but I don't understand why the tax calculator is making use of that whereas the charts aren't... . Those who earn £9500 aren't entitled to £3405 under any circumstances it seems)

zagfles

The HMRC calculator gives entitlement from now till the end of the tax year, ie about 8 months worth at the moment.

Icequeen99

The chart is correct.

You would get:

Basic element 1920
Couple element 1950
30 hr element 790

TOTAL: 4660

Income 9500 minus 6420 (threshold) is £3080 excess x 41% = 1262.80.

So maximum credits £4660 - reduction due to income of 1262.80 = 3397.20 which is about the same as the chart.

Difference probably due to HMRC doing the calc properly using daily rates and me doing it quickly.

IQ

David333

Icequeen99 wrote: »

The chart is correct.

You would get:

Basic element 1920
Couple element 1950
30 hr element 790

TOTAL: 4660

Income 9500 minus 6420 (threshold) is £3080 excess x 41% = 1262.80.

So maximum credits £4660 - reduction due to income of 1262.80 = 3397.20 which is about the same as the chart.

Difference probably due to HMRC doing the calc properly using daily rates and me doing it quickly.

IQ

Thanks very much for your help. That makes much more sense now!