Tax Credits - Scared to get pay rise

Sam_Bee

This has driven me bonkers trying to find out - all Tax Credit websites are out of date, and the phone enquiries, are well, trying not to provide the information.

I'm trying to find the 'brackets' for salary vs tax credits for 2007-08.
We are a couple, 1 child.

We work for own company, take home less than £16k combined, and receive full tax credits, and no additional benefits other than Child Benefit.

I'm scared that if I award us a small pay rise (i.e. £200 a year annum) it will tip us over the edge, and we will lose £3k tax credits. What is the figure for the year ahead we can earn without losing our tax credits?

Thanks in advance!

exil

You need to provide more info

specifically, how many children, and your joint gross income inc. interest from savings.

http://www.hmrc.gov.uk/rates/taxcredits.htm has the rates for 2007-8.

Unlikely you will lose £3k with a £200 increase in income! In general, the effect of tax at 22%, self-employed ni at 8% and tax credit withdrawal at 37% is to take 67p in each £ until your tax credits go down to £545 a year.

enabledebra

Tax credits use the previous tax year's income to work out the current tax year award unless the current tax year income is higher by more than £25'000. So if there is only a small increase in income in 07/08 they will use 06/07's income. The higher 07/08 income will be used for the 08/09 award. As the last post says it's a gradual reduction in the award to the basic £545 although gross income is used.

Gregm

try the 'do I qualify' form at http://www.taxcredits.inlandrevenue.gov.uk/Qualify/DIQHousehold.aspx

I just tested it and it tells me I should be entitle to more than I am getting - this needs looking into:)

Update

The above was showing that I should get £80/week more than I am so I just phoned the tax credit line and he checked my details and came up with figures I am actually getting so the form above appears to be way out.

clairec79

That site assumes a new claim for the rest of the tax year (I think it allows you to back date it 3 months and assumes you would get the back dated unless it's a new baby when it goes from date of birth