change of circumstances

scotty1971

i will hopefully will have a job by the end of the month which will mean an increase in wages of around £20000,do i tell the tax credits as soon as i get the job or do i wait until i renew next april,i understand it will affect my payments next year but will it affect my payments this year.

cheers

scott

Horseunderwater

I take it that you are not working at the moment? And I assume you are on JSA perhaps? Or if not perhaps you could enlighten people on here a little so that proper answers can be given.
Generally I would ring HMRC once you have started the job and give them a revised income estimate for this year. For example 8 months of the £20k would be approx. £13.333k - but you should not do it until you start the job. You have 30 days to tell them of the change of circumstances.

enabledebra

An increase of that size affects your tax credits in the year it occurs so you should tell them to avoid an overpayment.

The example below explains how it affects your current year (13/14) income assessment

CY means current year and PY previous year


Example 4: Tax Credits Act section 7(3)(b)
An initial award for the tax year 2013/14 (CY) will be based on the income of the household in the PY (2012/13 tax year). If the household income in the CY (2013/14) is more than £5,000 higher than the income in the PY, the award for the 2012/13 tax year will be reassessed on the income of the CY less £5,000.
CY income = £50,000
PY income = £20,000
Income used = CY income minus £5,000 = £50,000 - £5,000 = £45,000
CY income is more than £5,000 higher than PY income therefore the CY income minus £5,000 is used.

scotty1971

i'm a student nurse who works part-time,qualify in september and if i manage to gt a full time post it would increase my wages by about £20000

fat-pudding

It can affect payments this year as there is a disregard for earning more money, I got a huge pay rise this year and a bonus at the end of the year to backdate back earlier. This now means I'll have a large debt to pay back to the tax credits office.

The best thing you could do is work out what your entitlements are and either report it so no overpayment is made or you can try to use it as an interest free loan but you need to know what scale the overpayment will be and what will happen to your payments next year along with a plan to pay back the money!

zzzLazyDaisy

scotty1971 wrote: »

i'm a student nurse who works part-time,qualify in september and if i manage to gt a full time post it would increase my wages by about £20000

But that doesn't mean that you will earn £20,000 extra in this financial year.

scotty1971

zzzLazyDaisy wrote: »

But that doesn't mean that you will earn £20,000 extra in this financial year.

i realise that now thanks,just thought i had to give tax credits what my new salary was.anyway could be a long time before i get a job.

thanks for all the replies