Tax Credits: clarification on 'change in circumstances'.

splashproof

I returned to work in March this year having previously been on ESA. I applied for WTC in the same month noting my new employment details on the WTC form (although I wasn't asked about wages). This has led to the following two awards :

1) An award for 7 March to 5 April 2016 based on ESA from 6 April 2014 to 5 April 2015.
2) An award for 6 April 2016 to 5 April 2017 based on the same ESA income from 6 April 2014 to 5 April 2015.

Therefore, I've gone from an award based on a non-taxable benefit during 2014/15, to working 30 hours per week on the minimum wage - an increase of more than £2500 per year. I'm making the safe assumption that I need to notify tax credits of a change in circumstances before I am overpaid to the tune of £4000 in the year 2016/17.

Do I have to notify Tax Credits of two changes, the first, my wages for the month of March 2016 during tax year 2015/16, and secondly, that my new job is going to earn me substantially more than the £2500 disregard this coming years 2017/18.


I may have a few other questions I'd like to ask, however, initially I thought it best just to keep things simple - if you can call WTC simple. Many thanks for reading.

Darksparkle

You can update this current years income, 2016/17.

You cannot update next year's income, 2017/18 until April 2017 when that year starts.

You'll get a renewal notice to confirm your income for last year, 2015/16.

splashproof

Darksparkle wrote: »

You can update this current years income, 2016/17.

You cannot update next year's income, 2017/18 until April 2017 when that year starts.

You'll get a renewal notice to confirm your income for last year, 2015/16.

When should I expect the renewal notice ?


Opp's, I should have said this coming year 2016/17, not 2017/18. Sorry for the confusion.

I presume my tax credits will be adjusted this year from the current £4k award to - what I believe- should be around £810.

What does confuse me, is that on the tax credit website it says "Changes you must report.....income goes up by £2,500 or more"
https://www.gov.uk/changes-affect-tax-credits.

Yet on the entitled to website, it says "If your 2016/17 income is set to rise by more than £2,500 then you may be paid too much tax credits and will have to make a repayment next tax year. However, it is your choice as to whether you report a change in your income now or whether you wait for an automatic adjustment to be made by HM Revenue and Customs at the end of the tax year"

http://www.entitledto.co.uk/help/how-tax-credits-work

I've found several other advice websites that suggest you don't have to report increases in income, do you know why that is ?

Darksparkle

You actually posted the answer to your own question as per the entitledto website.

Technically you don't have to tell them during the year because it will be sorted at the end of the tax year when you do the renewal and the relevant adjustments will be made. However if you don't tell them until then it can lead to an overpayment which most people would look to avoid.

So my suggestion is that you always keep them informed of any change in income (regardless of whether it's more than £2500).

Renewals are sent between April and June each year.

splashproof

Thank you very much.


Yes, I agree. I'd rather not owe such a sum at the end of the year. Its scary how many people in a similar situation to me are adamant that this years tax credits are theirs come what may, because it was based on last years earnings !