Income Disregard ??? Please help

workinghard100

Hi,


Could someone please explain the Income Disregard to me ??? I have spoken to the Tax Credit Helpline but the explanations they give me conflict with previous advice they have given me.


The estimate for this years earning for my partner and I will be very close as we both work part time and share looking after our young family.


I have been given the opportunity to go full time at work with a reasonable amount of overtime for the next 4 weeks to cover a colleagues sickness, my partner with a family support could cover childcare whilst I work this period.


My earnings for the year will increase by £3000 by the end of the year.


The questions I have are ....


Will we get a big bill we have to pay back by the end of the year ?


What effect will this have on our Working Tax Credits for next year as after April we will be back to working our 2 part time jobs?


Will by taking the extra shifts cause us to be worse off in the long run.


I really od want to take these extra shifts as my boss was really good when I asked to go part time and I want to help him out but I am afraid by earning this extra money we are going to get a bill to pay back that we cant afford as cash is really tight or even worse we will get less next year when we are back to working our part time jobs.


Sorry for the long thread but I though to give as much detail as possible as I am really worried about this as I need to tell my boss if I can help out or not on Monday evening when I start my shift.


Thanks for reading folks, hope someone can help me out,


A hardworking bloke who cant understand the system

bll78

To put it simply earning £3,000 will not effect this years claim but
next year your claim will be effected.
So if last year you earned £20k and this year you earn £23k they will pay you based on you earning £20k.
However next year they if you earn £20k they ignore £2,500 drop in income so will base you income on £22,500.

You lose 41p for every pound you earn so actually you will be better off earning the £3,000k but be aware your claim will be slightly less next year
Also if you work 30 hrs+ for the next 4 week or however long and don't normally tell the tax credits as you'll be entitled to 30hr + amount

workinghard100

Thanks for the quick replies.


The £3000 is extra to the amounts which we advised the Tax Credit People at the start of the year and the figures they are using at the moment.


Both my partner and I work 16 hours each.


Our earning for this year 14/15 are going to be around £8300.


Our earnings for 13/14 were £7400.


Our Finalised Tax Decision for 12/13 we earned £13000.


Thanks again for the help.

workinghard100

After April I will go back to working my 16 hours, so I expect our earnings will be very similar to this year of £8300.


Many thanks for the help

zagfles

workinghard100 wrote: »

Thanks for the quick replies.


The £3000 is extra to the amounts which we advised the Tax Credit People at the start of the year and the figures they are using at the moment.


Both my partner and I work 16 hours each.


Our earning for this year 14/15 are going to be around £8300.


Our earnings for 13/14 were £7400.


Our Finalised Tax Decision for 12/13 we earned £13000.


Thanks again for the help.

So I assume you are you saying that this year's earnings will be £8300 without the extra £3000?

In which case, on £11300 this year, you're still in the disregard (increase is less than £5k since 13/14), so your tax credits this year won't be affected. That's the good news.

Bad news is that next year's will be affected. If you expect to earn £8300 in 15/16, then 15/16 tax credits will be based on £10800, so will go down by about £1025. But you'll be better off overall.

BTW are you both employed because your wages look to be below NMW?

workinghard100

Many thanks,


We are both employed, my partner was on maternity Leave at the start of the year and has only recently returned to work.


We are both on NMW.

allen35

Be sure to deduct £100 pw if partner was on SMP from your total earnings for Tax credits.

The first £100 pw is disregarded.