Income lower this tax year, is it based on previous year?

Doosht

Hi! First time post here.
Im having sleepless nights at the moment and would like some help regarding the thing thats troubling me.

Weve got 3 kids and get child tax credit. Last year (just ended) we earned 20k for me and 10k for wife ...30k total. This year i will only earn about 18-20k but my wife is giving up work next week so now our yearly estimate to april 2008 is about 20k or less.

A friend told me that tax credits are based only on previous years earnings. If this is correct then i will be a debt free wannabee in no time lol :rotfl:

Anyone clarify this please and hopefully help me sleep at night

Mrs_B_12

Ring them up and give them your estimated earnings for the year ahead. If your income is going to change a lot from the previous year they do adjust it accordingly.

Doosht

yes, i phoned them up on thursday and gave them the revised estimate for this tax year but never got told anything. Are you penalized at all for earning more the previous year or do you just get the same as if this was your first time claiming? I actually did all the calculations earlier on entitledto but came up with about 10k credit for 3 children which seemed well of to me.

Mrs_B_12

You should get a revised letter giving you the new amount if they change it. If you haven't had anything from them give them another ring and ask if they're going to change it.

Doosht

ok, thanks Mrs B. Im still on tender hooks really then.
I guess that aslong as they only consider this years income then i should be ok.

Mrs_B_12

As long as you didn't earn more than expected last year, and you would have been given a figure not to go over without informing them, last years claim won't have anything to do with this year.

Doosht

well i actually over estimated last year. I told them i thought i would earn 25k when i actually earned about 21k so hopefully good news then. Fingers crossed

Doosht

Also, my wife is basically giving up work to look after our 18month old child. Will she/we get any extra help being as i will be the only wage earner?

skintas_2

go to that site entiltled to or something and it does the calculations on there for you. as you only have one wage and three kids