Tax credits and maternity pay smp

Wellgood

Am filling in tax credits form and it says I can take off 100 GBP for every week of maternity leave. E.g. take off 3500 off my p60 Amount. Which I guess means we will get more in tax credits? Is this ok to do this as it means amount won't match your p60? Will I then get questions from hmrc? Also can someone explain the logic behind this adjustment? Is it because smp is classed as a benefit rather then taxable income? . Finally what happens next year as obviously our income for tax credits purposes will go up as won't be making mat pay deduction. Will they then say they overpaid us and we have to pay it all back?. Sorry for all the questions but struggling to make sense of it all.

Horseunderwater

How many weeks have you been on SMP this tax year just finished? I assume you are talking about 2012/13. If it was 35 then you would be due another 4 from this year when you finalise 2013/14.
If that is how many weeks then yes you do deduct £100/week off your gross pay from the P60. HMRC will not question this or they should not.
Is your joint income likely to be more than £5k up next year? If not then an income rise disregard would come into play.
Also is this you only child? If yes then providing your joint income is below the £26k gross mark you will still get some CTC. If this is a 2nd child then the threshold is a bit higher. Tax credits are generally simple and as long as you check the award you are sent once it is processed to make sure it is correct and if it is not then tell them inside 30 days then there should be no problem what so ever. Problems arise because people fail to check their awards or tell HMRC when circumstances change.

chelle_bell

Yes thats right about the £100 a week. Last week I had to do my renewal and last tax year I was on smp. Next year your tax credits will be based on what you earn from now until next April.

Scottishmummy

That's right, deduct £100 for every week of SMP up to a maximum of £3,900 if all in the same tax year if you took the full 39 weeks off. You must tell them though that you have been on maternity leave and have made the deductions. I think though that if you took the full 52 weeks off they don't class you as working for those last 13 weeks so you cannot claim working tax credit for those weeks (unless of course your partner was still working more than 16 hours per week). I just took the 39 weeks followed by holiday that was due so I could stay off another 3 weeks and went back to work on the 2nd April so was able to deduct the full £3,900 from my earnings.