Tax credits and change of jobs help

mrsspendalot

Last year my hubby lost his job so income went to 0 for about 2 weeks, then he got another job. He earned slightly more than estimated for 2006/7 because part of the year was on old job earnings (19k p.a.) as opposed to the low wage (11.5k p.a.) for the new job. His end of year earnings were £15462 as opposed to the £14500 I estimated. That will mean no entitlement to WTC this year and an overpayment for last year .... and so far we are getting nothing despite his earnings are going to be less this year. Basically I have been hanging on for the annual declaration and then say that earnings this year are expected to be less.

BUT ....

Today he has started another job. A bit more money, but not to start with. His wages are going to go up in stages. The training wage is £5.35 for as long as he is training, then up to £5.45 for 3 months post qualifying, then up to £6.10, plus a 40p an hour 'attendance bonus'. He is also going to be eligible to pay into a pension after 3 months. I just can't work out what this will mean for WTC estimated income for the year.

Should I give them an estimation for the whole year or tell them for now he is on £5.35 an hour and let them assess us on that and then when his income goes up to the top bracket contact them again with an up to date estimate? It is so complicated!!!

Also, should I hold off sending in the annual declaration until I have updated them on the change of circumstances?

CoopCooper

Personally, If you know how long he's going to be training for @ 5.35 per hour, and then 3 months @ 5.45, then up again - i'd do my best to give an estimate for the entire year.

You're more likely to pick up overpayments by constantly changing your income in-year.

If you say, for example, £11000 at first - thats what the computer will think you'll earn for the entire year and will calc your payments accordingly - and then 4 months later you say it'll be £14000 - you could see a reduction in your payments because it had been paying you at a higher rate.

If you're getting TC based on your estimated current income its better estimating higher - to prevent overpayments, and you'll receive any money you're owed when the year is finalised.

mrsspendalot

This is the thing - we have no idea how long he will be training for. He basically trains until he passes (bus driving). I think the best thing we can do is guess roughly about the training and then work out the rest as best we can like you say. Thanks