Tax credit entitlement & income question

pamaris

Hi,

Just read a bit of the overpayment thread and now I'm scared! Last week I sent out my tax credit claim application, for the first time. Last year my OH was not employed for much of the year and we were living on our savings (of which nothing is left). He received a full time job at the end of the tax year and one month of income is shown on his P60.

I attached a detailed note to my application which stated the situation, that last year OH only made £2500 but this year he is a full time salaried employee and will make £30k. So, please base my award on those facts, as we do not want to be overpaid on the assumption we will only get £2500 this year.

So, my question is, when they determine your award (I know we are only eligible for CTC)... do they base it entirely on last year's income, even if your present circumstances are different?

If they do screw it up and give us a huge payment, what should we do?

Thx!

DazzerG

The initial award is always based on the last full Tax year's income, in your case £2500.

When you receive it you will need to call them to advise of your new estimated income for 07/08 of £30k.

The revised award will then be based on £5000, which is £25k (the annual disregard, see previous posts about this) less than your 07/08 income.

Your 08/09 award will be based on £30k (assuming no change).

pamaris

So, will the initial award be correct? I mean, do I get to keep it or should I set it aside till they come up with the revised award?

Does anyone know an approximate amount that "looks right" in my situation for the initial award? Or does anyone know how I can get an estimate? I was assuming that since our income is now £30k, that is what our award should be based on, so if the award is not £40-50 per month then it is probably an overpayment.

If the initial award is based on £2500 income for the year, then it will certainly be more than £50 per month... if it is a large amount, is that what we are actually entitled to or should I assume we are being overpaid?

Sorry for all the questions! I am just trying to figure out what to do if we receive a BIG award and how to tell if we are entitled to it. I don't want to end up owing HMRC!

Thanks!

pamaris

OK, I think I am getting it... it scares me though because it means we will be getting a lot of money!!

Is it as simple as this, that the award for the current year (2007/2008) is based on the previous year's income (plus £2500 in our case).

Next year's award will be based on this year's income. 2008/2009 based on 2007/2008, etc. (till they change it again). Sorry to restate everything dazzerg posted above, but I am just getting it.

So, if the award is really big we can assume it is correct?

Thanks