Child Tax Credit - various queries.

Stroller133

I don't think we will qualify now despite having a second child and a drop in wife's income due to maternity. Last years income was not assessed at renewal as under new limits we earned more than £24k. Without p60 and P11d to hand our combined income last year was about £34k.

On that basis if we apply now initially last years income would be used first and still not qualify. I think 2 child cut off about 32k. Then this years estimated income is £30k and I thought would mean about £15 per week, but with this disregard this years would be £32.5k and not qualify again. I had heard of the disregard but just thought it meant you could not be re-assessed until your income changed by that much. I didn't realise you are scammed and they pretend you still earn it!

zagfles

Stroller133 wrote: »

I don't think we will qualify now despite having a second child and a drop in wife's income due to maternity. Last years income was not assessed at renewal as under new limits we earned more than £24k. Without p60 and P11d to hand our combined income last year was about £34k.

On that basis if we apply now initially last years income would be used first and still not qualify. I think 2 child cut off about 32k. Then this years estimated income is £30k and I thought would mean about £15 per week, but with this disregard this years would be £32.5k and not qualify again. I had heard of the disregard but just thought it meant you could not be re-assessed until your income changed by that much. I didn't realise you are scammed and they pretend you still earn it!

It works the other way as well, there's a disregard for income rises too (£10k this year, £5k next year), so for instance if you earned £20k last tax year and £25k this tax year you'd be assessed on £20k.

If they reassessed in full once over the disregard there'd be a cliff edge where a pound difference in earnings would make a massive difference to the award.

Stroller133

I think our best bet is wait until new tax year, then apply, then previous years income will be 2012/13 which is/will be about £30k. Next years income will be the same within 2.5k, at least for first 5 months.

Then hopefully in August I may be leaving my job to start a pgce course - my biggest headache then is understanding what income is relevant:

Bursary: £12000 (approx 1/2 in 13/14 tax year)
Loan: approx £3800 (1/2 in 13/14)
Maintenance grant: £3400 (1/2 in 13/14)
Not sure about some extra grants for households with income below 30k - depends on Uni but £250 - £2000.

I know there are some dependants grants that do count, but the rest appears not to be included from what I have read so far.


Does anyone have any experience/ knowledge on these issues?

If student income is not included then earnings for 13/14 will be:

Wife: £7k
Me (apr-aug): 12k

So assessed income would be 19k + 2.5k diregard = 21.5k

If this is correct our net income wil be huge during PGCE but some of this is a loan I will be paying back for the rest of my life, is mainly due to bursary for training to teach a shortage subject and my starting salary will be £21.6k instead of 28k + car. So in reality extra income would be saved for the lean years ahead while I establish my teaching career.

Wail

As far as I am aware, the students bits should not count.

krusher

i need some help , oh is taxed at source in paye and we have a company car we pay for all private mileage, new paye tax code for most people is 944l ours is nowhere near that, surely if i inform cash equivalent of car we will be paying almost double the tax , really confused , please can someone help, i dont work and get carers allowance

Icequeen99

krusher wrote: »

i need some help , oh is taxed at source in paye and we have a company car we pay for all private mileage, new paye tax code for most people is 944l ours is nowhere near that, surely if i inform cash equivalent of car we will be paying almost double the tax , really confused , please can someone help, i dont work and get carers allowance

Do you mean if you inform tax credits of the cash equivalent? It is exactly the same position as if his salary had increased by the same value of the car. You would have to declare that as well. I'm not sure I see what the issue is?

IQ

krusher

thanks for replying ice queen

he is already being taxed at source due to company car, the cash equivalent makes his salary more than it actually is , which affects our tax credits, and when you put together his new tax code plus the car he doesnt have a personal allowance, is this correct ? , , he earns 25000 with the car this makes 29000, i would rather his salary have this increase and actually see the money but that is never gonna happen in a million years

princessdon

You are not making sense. How do you get taxed twice?

A company car has no increase in salary. You earn x and a company car, your salary is still x. The value of the car is deducted on your p11d, so it lowers your personal allowance, it doesn't remove it. No company car I know has a £8100 pa p11d value.

Are you saying tax credits should ignore the value, is that it? Tax credits are nothing to do with tax, it's income as you have a car that you use so of course this needs accounted for. If you had a car allowance (extra salary) your tax credits would use £29k to work out tax credits.

krusher

princessdon thanks for your reply

when i spoke to tax credits they said that the company car cash equivalent is added to actual salary and this means that my husbands salary is increased by the cash equivalent which means my tax credits go down, if i didnt inform them of cash equivalent we would get more in tax credits , we dont have a car allowance, what i am saying that if you are already being taxed at source for the car do you still need to declare cash equivalent on p11d when claiming tax credits ?

princessdon

krusher wrote: »

princessdon thanks for your reply

when i spoke to tax credits they said that the company car cash equivalent is added to actual salary and this means that my husbands salary is increased by the cash equivalent which means my tax credits go down, if i didnt inform them of cash equivalent we would get more in tax credits , we dont have a car allowance, what i am saying that if you are already being taxed at source for the car do you still need to declare cash equivalent on p11d when claiming tax credits ?

Ah - no it shouldn't be added as far as I know. The salary tax credits need is his p60 and the car is deducted at source. What is his p60 figure?