tax credits reduced due to fuel payment

seagull77

hello my husband works for the nhs and was his job was moved to a different town against his will, The hospital trust pay him the fuel difference between the two towns (approx £2k per year) directly into his pay so he has to pay tax on it. We have now had our tax credits reduced because of this 'pay rise' plus an overpayment to pay back because we didn't declare imediately that he had this payrise. I have talked to tax credits and they say its basicaly none of their business. I would have gone to the union but we left because we couldn't afford the payments.
Just feeling despair this morning as we have only just been coping financialy (he has been on pay freeze for a couple of years now) and we have coped because we have always stayed out of debt but now we are down about £100 a month I feel myself slowly sliding into debt and not sure what I will do when our overdraft runs out. Any advice would be really helpful, I would love to cut down our outgoings but there is really nothing left to cut.....

zagfles

Yes tax credits are right - it's taxable pay so it will count as income.

Where you get taxable relocation allowances like this the employer usually "grosses" it up, so net pay after tax and NI pays the difference in cost. If they've done this it could be worth pointing out that you've lost out on tax credits and they should have grossed up his income even more to account for this. Worth a shot...

Also have a look at the debt-free wannabe board for budgeting advice - they will find you ways to save money.

seagull77

thanks for the reply, unfortunatly they cant grosse up his income because of the pay freeze. I am familiar with all the budgeting advice having been a lurker on MSE for years which is how we've stayed out of debt this long x