New income disregard query

[Deleted User]

Is the new £2500 income rise in earnings limit on 16/17 earnings, or is it on the 16/17 Tax credit claim.

I have heard both. My 15/16 earnings will be £2700 higher than my 14/15 earnings. I'm wondering if should pay £200 into a pension or something to get under the threshold?

Thanks.

Darksparkle

It compares 2015/16 to 2016/17 income.

2014/15 income won't be relevant to the 2016/17 claim.

[Deleted User]

Thank you, My earnings in 14/15 were £18670 & in 15/16 they will be £21370. I will notify HMRC but am I likely to see a drop? 16/17 income I can't see being over £24,000.

I'm struggling to understand how it works. I'm claiming as a single parent with £58 a week childcare costs, these will reduce to £15 a week once he starts school in September 2016.

Thank you.

Darksparkle

Yes it will drop in April because your income has went up. Likely to drop by around £22 per week.

It will then drop again when your circumstances change in September.

Your 2016/17 claim looks at income for 2015/16 and 2016/17.

If your 2015/16 income is £21,370 and 2016/17 income £24,000 it has increased by more than £2,500. Your 2016/17 claim will be based on £21,500 (£24,000 - £2,500).

You need to call them as soon as the tax year starts to update the 2016/17 income. The 2015/16 income can be updated anytime now (although will be counted as an estimate until you get the renewal form between April and May).

[Deleted User]

Darksparkle wrote: »

Yes it will drop in April because your income has went up. Likely to drop by around £22 per week.

It will then drop again when your circumstances change in September.

Your 2016/17 claim looks at income for 2015/16 and 2016/17.

If your 2015/16 income is £21,370 and 2016/17 income £24,000 it has increased by more than £2,500. Your 2016/17 claim will be based on £21,500 (£24,000 - £2,500).

You need to call them as soon as the tax year starts to update the 2016/17 income. The 2015/16 income can be updated anytime now (although will be counted as an estimate until you get the renewal form between April and May).

Thank you, that makes sense. I'm only assuming £24,000 as i've been told I 'may' have a payrise & bonus. My current situation is a salary of £21624 less 1% bonus so I can only tell them this. If I do get an increase I will certainly let them know.

Darksparkle

dalo wrote: »

Thank you, that makes sense. I'm only assuming £24,000 as i've been told I 'may' have a payrise & bonus. My current situation is a salary of £21624 less 1% bonus so I can only tell them this. If I do get an increase I will certainly let them know.

Personally, I would tell them £24,000 from the start. That way if it does end up being that, you won't have been overpaid.

If it ends up being less, they'd owe you.

Just my personal opinion. It's always better to overestimate.

FRESTER

Sorry to jump in on someone's thread.

Our income has gone up £4700 (15/16) from what it was in 14/15.

Am I correct in thinking it won't effect our tax credits award for 15/16 because the disregard threshold is still 5000 for this tax year ?

Darksparkle

FRESTER wrote: »

Sorry to jump in on someone's thread.

Our income has gone up £4700 (15/16) from what it was in 14/15.

Am I correct in thinking it won't effect our tax credits award for 15/16 because the disregard threshold is still 5000 for this tax year ?

Yes..........