Tax credit underpayment question

babyboots_2

Hi all,
Hope someone can help.

I estimated my 2012-2013 income for tax credits at the beginning of 2012 tax year and informed them via the renewal process. I underestimated by around £8000. I telephoned and informed them of the actual income yesterday which they could still only take as a estimate until finalised. We have been underpaid for 2012-2013 by about £1000.

What happens to the £1000? Do we receive it at all? will it be added to 2013-2014 amount or will it be paid as a lump sum? TIA
Boots

Horseunderwater

When you say underestimated income do you mean your income was £8k less than anticipated? If so, you will get a new award letter shortly acknowledging this fact and it will show on there what the potential underpayment really is or do you mean it was £8k higher. If the latter then you will owe them and they will adjust next years award to collect it back. However there are income disregards of £2.5k and £5k in place that may mean that there will be no underpayment. All you can do is wait for the award letter to come - takes about a week or so. I just did my final estimate so that it is correct for coming year and will finalise it in June when I get renewal. Was told that it should on or around same time as last year.

babyboots_2

Hi

I underestimated our income by about £8000.

Even with the income disregard we have been under paid around £1000. The total amount of tax credits received was £189 for the year. It should of been around £1200 for the year.

Boots

shaniannie

babyboots wrote: »

Hi

I underestimated our income by about £8000.

Even with the income disregard we have been under paid around £1000. The total amount of tax credits received was £189 for the year. It should of been around £1200 for the year.

Boots

You mean you overestimated meaning your actual income was £8k lower than you told them?

babyboots_2

shaniannie wrote: »

You mean you overestimated meaning your actual income was £8k lower than you told them?

Apologies yes I over estimated its been a long day.......

Horseunderwater

Ah so your income was lighter by £8k approximately. That means in reality with the £2.5k disregard that it will be £5.5k down as they add the disregard to your income to get the true underpayment. This will be on your award letter when it arrives.