Child Tax Credits Help Please?

too_much_debt

Hi

I rang Tax Credits in October last year to estimate our income for the 13/14 tax year.

I am looking at the amended tax credits award now and wanted to ask how do they work out the 'Reduction due to your income' part.

We have three children aged 9, 8 and 5.

Income for 12/13 was £31,647.00

Income for 13/14 is £30,284.64 (I estimated it at £29,900)

(This tax year salary will be estimated at £29,200)

My payments for this tax year (14/15) 15th April will be £292.29 and every 4 weeks until further notice £290.31.

Under 'Family Elements' it has:

Basic £547.50

Total Child Tax Credit elements £8,716.20

Reduction due to your income £5,656.46 (how do they work this out please?)


Thanks in advance for any replies.

TMD

zagfles

too_much_debt wrote: »

Hi

I rang Tax Credits in October last year to estimate our income for the 13/14 tax year.

I am looking at the amended tax credits award now and wanted to ask how do they work out the 'Reduction due to your income' part.

We have three children aged 9, 8 and 5.

Income for 12/13 was £31,647.00

Income for 13/14 is £30,284.64 (I estimated it at £29,900)

(This tax year salary will be estimated at £29,200)

My payments for this tax year (14/15) 15th April will be £292.29 and every 4 weeks until further notice £290.31.

Under 'Family Elements' it has:

Basic £547.50

Total Child Tax Credit elements £8,716.20

Reduction due to your income £5,656.46 (how do they work this out please?)


Thanks in advance for any replies.

TMD

1) Estimated income in 13/14 was within the disregard (ie within £2500 less to £5000 more than previous year), therefore in 13/14 they use 12/13 income. ie £31,647

2) The taper rate is 41% of income above £6420, ie 41% of (31647-6420) = 10343.07.

3) £4686.60 of this taper is used against WTC, reducing it to zero.

4) That leaves £5656.47 of the taper to use against your CTC.

5) So I reckon they've paid you 1p too much

6) Your estimate being out won't result in an overpayment as your actual income is still within the disregard.

too_much_debt

Thanks very much Zagfles, very helpful, I appreciate your reply.