NT code and Tax Credit renewals

fluffy70

Just wanted to give people a heads up - I went BR on 5th June last year (3 days to go!!!) and eventually had an NT code applied so that I could make some temporary IPA payments to Clarke Wilmott each month.

We receive Working Tax Credit - just under £50 a week which basically pays for our food shoping for myself, my husband and our son. However last week this was reduced to £26 and when I queried it I was told that because the were finalising my award for this year (don't know quite how as we haven't received the renewal pack yet) this was our entitlement. They (HMRC) have apparently used my P60 figures which are higher than usual because of course I didn't pay tax for some of last year.

So in short, having an NT code so that I could pay Clarke Wilmott has adversely affected us as HMRC just look at the income for last year and see that I earned more.

Nothing I can do about it I guess but just wanted a moan really

Croney82

The number you submit to HMRC for your tax credit renewal is your gross wage, i.e before tax and national insurance so unfortunately it looks like you have just earnt more in the last tax year.
Sorry

TheGardener

I’ve been trying to reply to your post for a couple of days but the web site has been playing up. Losing your TC’s is not necessarily right at all. This happened to me and when I called the helpline, the lady I spoke to understood and was surprised the ‘system’hadn’t picked it up. You need to call them and explain. If your IPA allows you to keep some of your tax money then you may lose a bit of TC’s but if all your tax is being paid into the IPA you are still entitled to the TC’s.

TheGardener

Croney82 wrote: »

The number you submit to HMRC for your tax credit renewal is your gross wage, i.e before tax and national insurance so unfortunately it looks like you have just earnt more in the last tax year.
Sorry

This is not correct - the OP has not earned more if the tax is being paid into an IPA

Croney82

I didn't say tthe OP has earned more because the tax is being paid to the IPA, as I said previously when you do your tax credit renewal the figure you give them is BEFORE tax, so irrelevant as to whether the money has been paid to HMRC or IPA or whatever, the OP must've earnt a higher gross wage than was estimated for the previous tax year for the tax credits to be reduced. unless of course OP has a child that has just turned 1 or one that has left education.

TheGardener

Neither did I - I was trying to say that earning more is not the only reason a TC award might have changed and that if she believes her BR has affected her TC claim, she should challenge it.

My understanding is that the figure HMRC use is before tax and insurance but after pension contributions. If there have been changes to the pension contributions – or – she has been allowed to keep some of the tax she would have paid – or - there has, as you say been a change in the entitlement, these are all reasons for a reduced award.

What is also usual at this time of year is that the payment is reduced in the 1st month or two of the new financial year while the new award is calculated.

fluffy70

Hi

thanks for your input everyone - I finally managed to get through to HMRC after a few days of trying and a final wait of 36 minutes on hold - as soon as I said that my TC had effectively been halved but I'd had no increase in salary in real terms as my NT code meant that I was paying an IPA the man on the end of the line immediately put me through to someone else to explain. They said that I need to note that on my renewal forms (which were sent on 20/05 but I've never received so thankfully they're sending another batch out)

So basically I'm assuming now that if you do have an NT code and an IPA then you need to tell Tax Credits as otherwise they'll assume that your salary has increased/ and although they take your gross income from the P60 they also use your NET income to calculate the tax credit entitlement

betterdaysahead

Congratulations on getting to AD!!! (I have another 18 days to go myself and every day seems to drag on longer and longer!)
BDA

fluffy70

Thanks!!!! I'd actually forgotten that it was today!!!!!! :0

Helpmeoutofthismess

fluffy70 wrote: »

Thanks!!!! I'd actually forgotten that it was today!!!!!! :0

Congratulations on AD, I can't believe you forgot :rotfl: I can't believe my AD was 1 year ago today, the second year has flown faster than the first year :j

H x