Child Tax Credit - working out

RealWelshWizard

Hi ,

A quick question - i'm just looking at the tax credit table - they say earn up to £25k get £2975 for 2 children. Is that 25k after tax or before?

hope this make sense and someone can help.

Thanks,

Caz3121

before tax

Trips

Yeah it's before deductions. They take the net profit figure if your self employed but if your employed its always the gross figure before deductions they use.

princessdon

But you can deduct childcare vouchers and pension payments

Trips

Childcare vouchers though your employer are not taken off your income & only personal private pensions not paid through your employer can be deducted.

princessdon

Trips wrote: »

Childcare vouchers though your employer are not taken off your income & only personal private pensions not paid through your employer can be deducted.

Childcare vouchers via your employer are salary sacrifice (therefore affect your p60).

Pensions via your employer - affect your P60

Pensions via a private company- you need to show.

Either way pensions and vouchers (unless vouchers are not salary sacrifice which are pretty rare) reduce the figure used to determine your Tax Credits as neither are subject to Tax

Trips

Childcare vouchers do affect your p60 but for tax credit purposes the value doesn't count at all in your income for tax credits.

Pension,contributions via your employer are not taken into account for tax credit purposes.

Private pensions not through the employer for tax credits are deducted from your income for tax credits.

Edit:- anyway for OP it's the gross figure.

princessdon

I think we are at cross purposes. We are both saying to decuct any pensions and vouchers and use the net figure.

Ie if you earnt £25K and £5k was vouchers and pension - the Tax Credit figure is £20K (not gross).