Working Tax credit- I don't understand how it works

borderline

zagfles wrote: »

As above check your tax code - if you're only getting £1000pm take home on a £16k salary then you're being overtaxed. Check if they have your new job down as a second job, ie tax code BR. You should have a tax code of something like 944L.

For tax credits - what was your income for the 2012/13 tax year and what is your income likely to be for the 2013/14 tax year? (it's income over the whole tax year which is relevant).

yes, that's my tax code 944L.
I was earning £21,000 a year in my previous job (before tax), I was made redundant in June. Unemployed for 3 months, got this job that I started at the end of September that pays me by the hour , £8 an hour (40 hours a week) which I believe is about £16,000 a year before taxes

pmlindyloo

The income threshold for a single person aged over 25 and working 30 hours a week for tax credits is unfortunately about £13000.

Generally speaking someone on this fairly low income living in London would be entitled to Housing Benefits (the local housing allowances in most parts of London reflect the horrendous rents charged) so your 'sticking point' is the fact that you have savings.

I'm afraid your options are pretty limited.

Find a job in a cheaper part of the country.
Take a second job in the evenings/weekends
Supplement your income with your savings and then claim HB

Good luck!

zagfles

borderline wrote: »

yes, that's my tax code 944L.
I was earning £21,000 a year in my previous job (before tax), I was made redundant in June. Unemployed for 3 months, got this job that I started at the end of September that pays me by the hour , £8 an hour (40 hours a week) which I believe is about £16,000 a year before taxes

Then it's even more than £16k, it's £16640, which should be take home £1177 a month with a 944L tax code. Do you get paid monthly or is it weekly or 4-weekly? If so you need to account for an average month being 4.35 weeks not 4 weeks.

Re tax credits - your income this year looks like being around £12500 give or take a bit depending when in June you lost your last job and assuming you got contribution based JSA for 3 months, but you still wouldn't be eligible for tax credits if your last job was for the whole of the last tax year ie you earned £21k on 2012/13, since they disregard the first £2500 drop ie you'd be assessed on £15k.

HOWEVER - it may be worth applying anyway, since if you lost this job before the end of the tax year you might get something (not now, but later). You'll get a zero award initially but it'll be finalised on renewal in Apr-Jun. Definitely worth doing unless your current job is fairly secure.

borderline

zagfles wrote: »

Then it's even more than £16k, it's £16640, which should be take home £1177 a month with a 944L tax code. Do you get paid monthly or is it weekly or 4-weekly? If so you need to account for an average month being 4.35 weeks not 4 weeks.

Re tax credits - your income this year looks like being around £12500 give or take a bit depending when in June you lost your last job and assuming you got contribution based JSA for 3 months, but you still wouldn't be eligible for tax credits if your last job was for the whole of the last tax year ie you earned £21k on 2012/13, since they disregard the first £2500 drop ie you'd be assessed on £15k.

HOWEVER - it may be worth applying anyway, since if you lost this job before the end of the tax year you might get something (not now, but later). You'll get a zero award initially but it'll be finalised on renewal in Apr-Jun. Definitely worth doing unless your current job is fairly secure.

I get paid every two weeks, so many months I'll only get 1,087

I understand that I have to call them up for them send me an application, right? they might not even send me one just based on that I'm earning above £13000k

zagfles

borderline wrote: »

I get paid every two weeks, so many months I'll only get 1,087

Right - but some months you'll get 1629, just makes budgeting harder!

I understand that I have to call them up for them send me an application, right? they might not even send me one just based on that I'm earning above £13000k

They will send you one if you insist. Just tell them you're not sure of your income this year (as nobody really can be). You won' tget anything unless you lose your job, but if you do and apply later it can only be backdated a month. If you apply now you'll get a zero award but it'll be adjusted at renewal if you do end up losing your job. Up to you whether you think it's worth it - may not be if your job is secure.

bunnygirl007

Excuse me jumping on this thread but reading this got me thinking!
I'm likely to be losing my job at Christmas, maybe sooner. Last 2 years I've had WTC but this year at review it was stopped based on their calculations of what I'd be earning this year even though it was actually under 13k. Anyway my question is, if I lose my job in December then my income for the year will be a lot less than what they calculated so does that mean I could put in a new claim for WTC if for example I've only earned approx 9k? I now I'm probably being a bit dippy here but just a thought and if you dont ask you don't get ;-)

zagfles

bunnygirl007 wrote: »

Excuse me jumping on this thread but reading this got me thinking!
I'm likely to be losing my job at Christmas, maybe sooner. Last 2 years I've had WTC but this year at review it was stopped based on their calculations of what I'd be earning this year even though it was actually under 13k. Anyway my question is, if I lose my job in December then my income for the year will be a lot less than what they calculated so does that mean I could put in a new claim for WTC if for example I've only earned approx 9k? I now I'm probably being a bit dippy here but just a thought and if you dont ask you don't get ;-)

Yes. When you say "it was stopped" do you mean you got a zero award, or your claim was ended? If you got a zero award then you should still be in the system. But they sometimes write to people saying they don't think you'll get anything and that the award will be terminated if they don't hear from you.

If the award was terminated then reapply, though they can only backdate the claim a month.

borderline

zagfles wrote: »

Right - but some months you'll get 1629, just makes budgeting harder!

They will send you one if you insist. Just tell them you're not sure of your income this year (as nobody really can be). You won' tget anything unless you lose your job, but if you do and apply later it can only be backdated a month. If you apply now you'll get a zero award but it'll be adjusted at renewal if you do end up losing your job. Up to you whether you think it's worth it - may not be if your job is secure.

£1629? how so? not even before tax !
My job is secure unless I don't pass the probationary period but that's very unlikely to happen

zagfles

borderline wrote: »

£1629? how so? not even before tax !
My job is secure unless I don't pass the probationary period but that's very unlikely to happen

Sometimes you'll get paid 3 times in a month. You get paid 26 times in a year, there are 12 months, so most months you'll get paid twice but in two months you'll get paid 3 times. Makes budgeting quite hard but you'll need to put aside the extra when you get paid 3 times.

bunnygirl007

zagfles wrote: »

Yes. When you say "it was stopped" do you mean you got a zero award, or your claim was ended? If you got a zero award then you should still be in the system. But they sometimes write to people saying they don't think you'll get anything and that the award will be terminated if they don't hear from you.

If the award was terminated then reapply, though they can only backdate the claim a month.

Thanks, I think it was zero award but will have to dig out my paperwork to be sure.
So do I put in an application now and say that I anticipate my earnings for the year to only be 9k for e.g?