How do they calculate Child Tax Credit ?

plaistow_2

I earned 24k Last year and year before i earned around 20k and today i have got my first payment of child tax credit ..

All i need to know how do tax office calulate child tax credit towards the previous year earning or do they calculate the current salary you getting ?

Because i will be earning less this year.

Please comments.

Caz3121

They work it off the previous years income unless your income have increase by more than £5k or decreased by more than £2.5k

so year 1 income £20k and year 2 income £24k
Claim would have been based on £20k (as the increase was less than £5k)

year 3 income X
If X is more than £21.5k then the claim will still be based on the £24k earnt the previous year
If X is less than £21.5k then the claim will be based on the earnings + £2.5k (so if new earnings=£15k then the claim would be calculated on £17.5k)

note, initially the claim will be assessed on the previous years income. When you receive your award notice you can contact them and give them a new estimated income for the tax year

plaistow_2

Caz3121 wrote: »

They work it off the previous years income unless your income have increase by more than £5k or decreased by more than £2.5k

so year 1 income £20k and year 2 income £24k
Claim would have been based on £20k (as the increase was less than £5k)

year 3 income X
If X is more than £21.5k then the claim will still be based on the £24k earnt the previous year
If X is less than £21.5k then the claim will be based on the earnings + £2.5k (so if new earnings=£15k then the claim would be calculated on £17.5k)

note, initially the claim will be assessed on the previous years income. When you receive your award notice you can contact them and give them a new estimated income for the tax year

They have calculated my child tax credit on 24k basis which is previous year earning but infact it its less then 5k compare to the previous year.

Do you think they have calculated rightly ?

Thank

Caz3121

If you have received your award notice then you can call them and give them your estimate for 14/15 and they shouls adjust the award and provide and updated award notice