Tax credit notice driving me mad!!!

kellemeek

Hi there,

Myself and partner was on jobseekers allowance for april 2004 - 2005
Now he is working and gets £16000, tax credits have sent me an award and are saying they will give us

child tax credit £2001.64
Working Tax Credit £3462.12

for the 2005-2006 period is this because we where on jobseekers allowance for the 2004/05 period? and will this go down next year or have they made a MAJOR MISTAKE? because as far as i knew on 16000 we were not entitled to anything and i cant afford to pay this back if that is the case. when they send a nasty letter at the end of the tax year!

If anyone can help!! its driving me mad!!

Thank you

Kelle

Trow

The award is based on the previous year - you have an obligation to let them know if it changes significantly. All you need to do is phone the number on the award and let them know the estimated income for teh year to 04/05 - you may well be still entitled to something, but its best to let them know asap otherwise you could have a significant overpayment.

HTH

CIS

On https://www.alwaystots.co.uk , theres a tax credit calcualtor link on the left hand menu. Its still under work at the moment but can give you a rough guide as to what your award will be for 05/06

Ted_Hutchinson

Entitledto
Tax Credits Online
You can play with these two calculators as well.
They may give slightly different results because of the different ways they operate but both could be right depending on whether you are considering the whole tax year or the remainder of the current year.

Bossyboots

You are entitled to credits on £16,000, but you need to use the calculator to see how much.

Spendless

You are definately entitled to tax credits on an income of £16,000. Use the websites given to calculate how much.

You are still entitled to tax credits on a much higher income (upto around £50,000) you would just receive what is known as the family element (£545 p.a).

CIS

I tried EntitledTo and it was out by about £2000 for the tax credits. Does anyone get a correct figure out of it ? or is it just me.

crutches

not just you i could not get anyfigures out of it!

irs101

Kelle

I think you've got all the information you need here, from various people. But to bring it together....

Yes, you are entitled to tax credits.

You are around the point where you get no WTC, but will get virtually maximum CTC.

Your current award is too high because they have based it on your very low income from last year.

You are under no obligation to tell them about your higher income at this stage. (Trow is wrong to say otherwise below). You do not have to tell them until after the end of the tax year, but if you wait until then you will have a large overpayment (you will owe HMRC around £2,000) and they will reduce your award in future years by 25% until you have paid it back.

On which calculator to use, if you want to know how much you will get between now and the end of the year (if you are making a new application) use Tax Credits Online. If you want to know what your annual award is use Entitledto. I would not recommend using any other calculators. Obviously the HMRC one should be right and the Entitledto one is written by two ex-DWP benefits specialists and the code they use accurately reflects the calculation HMRC use (which is slightly different to the legislation, believe it or not!).

I would say that I've found errors in over 90% of other calculation websites or spreadsheets I've looked at. And it's normally because they use the HMRC guides as the basis for their calculations, rather than the legislation. For example, the alwaystots site (suggested below) doesn't even get the family element right (it says £545 rather than £547.50). A small error, but if they can't get the simple things right, what about the difficult bits....?

irs

CIS

Why do IR publicise £545 both in their literature and in the statutory instruments if the actual calculation uses £547.50 ?

The entitled to website is always out when I compare it to my real cirumstances using a quick manual calc and the award notice. It was out by quite a bit, some of the other tax credit calcs Ive used are a good bit more accurate.

I think the main point with the calculators is that they are meant to be ballpark figures (to within about £10-£15p/m), to give an idea of entitlement but I found entitledto was way outside that ballpark.

System

I'm not 100% sure about how tax credits work but looking at my award notice for 04/05 which I got last year on page 2 and 3 it outlines the information on which our award was based and says

"Please tell us if your hours change or you leave your main job"
obviously both my husband were working.

In your case one of you has moved off benefits into work and your income has increased so I would have thought that it was your responsibility to inform the tax credit office of the change in circumstances which will affect your entitlement. I would assume this would include the date your husbands benefit claim ceased and the date he started his job. I believe they also require the name, address and tax reference of the new employer.