Tax Credits - underpaid?

parchedpeas

Hi,

Case question:

A couple, both self-employed (working for own company). He works 40 hours pw, she works 35 hours.

1 Child, aged 2. No childcare fees (Grandparents to the rescue!)

2013/2014 gross earnings: £23500
2014/2015 gross earnings: £15500
2016 estimated earnings: £16000

Current CTC+WTC payment is £171 per month.

Am I right in thinking this is not right and they are being underpaid? And that the figures dont seem to have been revised since 2014 award?

And if so, what should they do?

Thanks for the help!

zagfles

You need to quote income for tax years, by 2014 do you mean 2013/14 tax year?

Have they had their 2014/15 award finalised?

parchedpeas

Yes figures are approximate, for year end (to April).

No, they haven't been finalised for 2015 yet which is how the conversation came up. They were asking about extra CTC now their little one needs some childcare.

parchedpeas

Thank you blondebubbles. That seems a bit more like it.

So they've been underpaid for a long time. How's the best way to correct this? Phone up, or wait for the 2015 finalised award?

Does this kind of thing get reimbursed, or is it just tough luck?

Suarez

parchedpeas wrote: »

A couple, both self-employed (working for own company). He works 40 hours pw, she works 35 hours.

2014/2015 gross earnings: £15500

Thanks for the help!

Is the business viable? That's an average hourly rate of £3.97...

Pennywise

parchedpeas wrote: »

2013/2014 gross earnings: £23500
2014/2015 gross earnings: £15500

What do you mean? "Gross" usually means before expenses/costs, etc. "Gross earnings" would usually mean top line sales income.

The figures to use for tax credits are "net profit" i.e. sales less allowable costs, or taxable profits as per the SA return.

Icequeen99

Pennywise wrote: »

What do you mean? "Gross" usually means before expenses/costs, etc. "Gross earnings" would usually mean top line sales income.

The figures to use for tax credits are "net profit" i.e. sales less allowable costs, or taxable profits as per the SA return.

This is correct. Although I also wondered whether they were actually self-employed. The OP mentioned that they were working for their own company which suggests they could be employees? Are they also taking dividends?

IQ