Am I entitled to tax credits?

stripeyzebra19

So in 2014 my partner and I were both in full time work. For the tax year 13/14 our combined income was 45k. In June 2014 I went on maternity leave for a year. Just before I left I got a promotion and also a payrise. Whilst on maternity leave my company paid 6 months full pay, 3 months basic, 3 months nothing. So because of my payrise etc I ended up earning a similar amount that year even though I was on maternity. So for the tax year 14/15 our combined income was 43k. As soon as I started maternity leave I applied for tax credits just so I was on the system, and as expected it came back entitlement 0. I was due back to work in June 2015 however decided to stay at home to look after my daughter.

Now since I had heard they base your award on the previous years salary I thought I would have to wait until April 2016 before I could give them my 15/16 combined income details. However in October 2015 I found out this is not the case and I should inform them of any drop in income straight away so I did. My income for 15/16 is £1126, and my partners will be the same again at around 24k. However our entitlement came back again as 0. I just wondered if someone could explain this to me as I find the whole thing very confusing, am i not entitled to anything?

Many thanks

Darksparkle

The limit for one child is approx £26,000.

When your income decreases from one year to another they disregard the first £2500, so if 2015/16 income is £25,126 you'll be treated as earning £27,626.

You may be able to claim a small amount from April onwards, about £8 per week.

stripeyzebra19

Darksparkle wrote: »

The limit for one child is approx £26,000.

When your income decreases from one year to another they disregard the first £2500, so if 2015/16 income is £25,126 you'll be treated as earning £27,626.

You may be able to claim a small amount from April onwards, about £8 per week.

Thanks so much Darksparkle that explains all I needed to know.

Just wondering where did you find this information? I was looking at the table on the gov website for working at least 16 hours with no childcare which shows 30k as the limit? Thanks again!

Caz3121

£30k here shows no tax credits and £495 for an income of £25k...the cutoff is in between
https://www.gov.uk/government/publications/tax-credits-entitlement-table-working-at-least-16-hours-and-no-childcare/tax-credits-entitlement-table-working-at-least-16-hours-and-no-childcare

Darksparkle

stripeyzebra19 wrote: »

Thanks so much Darksparkle that explains all I needed to know.

Just wondering where did you find this information? I was looking at the table on the gov website for working at least 16 hours with no childcare which shows 30k as the limit? Thanks again!

The table doesn't say it stops at £30,000. It shows there is no entitlement at £30,000. The table can't show every single income.

I know how to calculate tax credits (sadly!)

A couple, with one working at least 30hrs, with one child is entitled to a maximum of £8105 (if no childcare or disabilities). This is then reduced by income.

Earnings under £6420 don't affect tax credits. Anything above this is reduced by 41p for every £1 earned.

So the calculation is:
(£25,126 - £6420) x 41% = £7669
£8105 - £7669 = £436
£436 / 52 = £8.38 per week.

stripeyzebra19

Darksparkle wrote: »

The table doesn't say it stops at £30,000. It shows there is no entitlement at £30,000. The table can't show every single income.

I know how to calculate tax credits (sadly!)

A couple, with one working at least 30hrs, with one child is entitled to a maximum of £8105 (if no childcare or disabilities). This is then reduced by income.

Earnings under £6420 don't affect tax credits. Anything above this is reduced by 41p for every £1 earned.

So the calculation is:
(£25,126 - £6420) x 41% = £7669
£8105 - £7669 = £436
£436 / 52 = £8.38 per week.

Wow Darksparkle such a clear and concise answer you really do know your stuff. Could you possibly show me the same calculations for a couple with 2 children? I am expecting my second in July.

Darksparkle

stripeyzebra19 wrote: »

Wow Darksparkle such a clear and concise answer you really do know your stuff. Could you possibly show me the same calculations for a couple with 2 children? I am expecting my second in July.

That wouldn't be as simply because a change in happening during the year so the child element would need to be be pro rata based on the date the child was actually born.

stripeyzebra19

Hello everyone, DarkSparkle said I should be entitled to a small amount of tax credits in April however I am yet to receive anything. Does anyone know if this is something that will take time to be processed or do I have to call them up to give the figures again?

Many thanks

Darksparkle

stripeyzebra19 wrote: »

Hello everyone, DarkSparkle said I should be entitled to a small amount of tax credits in April however I am yet to receive anything. Does anyone know if this is something that will take time to be processed or do I have to call them up to give the figures again?

Many thanks

If you already updated the 2015/16 income as per the details you told us (£25,126) then it should have been set up already.

You'll need to call them and discuss. You can update an estimate for this tax year.

stripeyzebra19

So it turns out my partner earnt more last tax year and we earned a combined income of 28,057. I gave in the estimated amount of 24k for my husband's salary last tax year. However I just tried to call them to give them the actual details and they said I have to wait for my renewal pack first?! Is this correct? I don't see why I can't just give them the figures on the phone. My income for the current tax year will be 0 and I'm going to estimate my husband's to be the same as last year which was 26,931. If I provide this estimate can I expect to receive anything once they update things?

Many thanks!

Caz3121

stripeyzebra19 wrote: »

My income for the current tax year will be 0 and I'm going to estimate my husband's to be the same as last year which was 26,931. If I provide this estimate can I expect to receive anything once they update things?

as the actual income was 28,057 they will use that income for the award unless the estimated income will be £2.5k +/- that figure (and even if so they will ignore the first £2.5k) As your estimate is £1.1k less than the previous year they will still use the previous years income which is too high for tax credits for one child with no childcare/disability