How simple is it to get working tax credits?

Rachel27

I have only recently turned 25 and become eligible for tax credits. However, I currently work 40 hours a week and my income received for the last tax year was just over the limit for working tax credit.

I have now been off work for the past 5 weeks with stress. I returned to work today and had a talk with my manager. I brought up that I was thinking about dropping down to 30 hours a week as I think this would really help my stress situation.

But on the online tax credits calculator it only takes into account what I earned last year, not what I estimate to earn this year... can someone explain the process in more detail? I have ordered the tax credit form online so hopefully will get it soon.

Will I be able to claim working tax credit if I drop down to 30?

Caz3121

Rachel27 wrote: »

Will I be able to claim working tax credit if I drop down to 30?

Tax credits worlk full tax year income and they have disregards
If your income last year was £15k and you are expecting your income this tax year to be £10k then you will qualify for a little tax credits (about £250 total for the year) as they will base your claim on £12.5k (as there is a £2.5k disregard)

If your income last tax year was £15k and your estimated income for this year is £13k then you will not get any tax credits as they will still base the claim on £15k as your income is not over £2.5k lower than the previous year

To see if you qualify you would need to work out what your income will be this tax year. check that it is more than £2.5k lower than the previous tax year. Make an initial claim, receive a nil award and then contact them with the estimate and they can amend the award

note: if your income ends up being more than your estimate then you could end up with an overpayment so if there is a possibility of bonus or overtime you would be best to factor that in