help please with regards to working tax/what am i entitled to

Cook_County

I am a little confused here because you had previously said on another post that your income was £17,000 a year. It seems to have jumped. Don't forget to also mention the £20,000 your mum was giving you...

sneekymum

Jumped to what? & what's mother's gift got to do with anything?

So we earned very little in 2002-2003 (on which the Tax Credits people insisted on basing their calculations) and then we earned quite a lot in 2003-2004 - for which the tax credits kept coming & I tried very hard to stop them. And this last tax year we earned about £17K which I'm about to reduce to nearly nothing using my mother's gift for pension contributions for this year and last. (Having first checked with a Tax Expert that this is OK)

Why does this bother you?

My post was to highlight the inflexible nature of the Tax Credits system. Not an invitation for you to try to catch me out.

Cook_County

Dear SM

The reason for mentioning mum's gift is because to be entitled to credits your savings have to be taken into account and therefore declared.

Tax credits look at worldwide income and savings (income tax will not necessarily).

sneekymum

Tax Credits disregard the first £300 of income from investments - which is why I'm sending most of mother's gift to a pension fund - you're right - it pays to think before investing -

Of course putting overpaid tax credits in an account earning interest reduces tax credits by 37p in the pound for every pound of interest (including that from all other interest bearing accounts) which is over £300 in the tax year - but that's how crazy the tax credit system is - after some months of trying to give back overpaid tax credits they reduced this years payment which was already too little - but ISAs do not have to be declared on the Tax Credit Form - see the Annual Review Guidance Notes Page 31 (nor National Savings Certificates).