Carers allowance, taxable income and tax credits.

elaine373

Please bear with me. Hope this question makes sense.

I currently get carers allowance as I care full time for my son who is in receipt of DLA. I started receiving it this year and notified tax credits immediately. I expected a drop but didn't really see any difference until my self employed husband put in his tax return a few weeks ago. Yesterday I received a £92.49 (weekly) drop in my tax credits. Approx 45 from child tax credits and 47 from our working tax credit.
My question is, is it sometimes better not to receive carers allowance? Because from what I can tell, it's deducted from working tax credit as well as making our overall income higher, therefore child tax is also deducted. Also, my husband will be taxed more because his overall income ( our household) is higher than if I did not receive carers.

Sorry for the confused question but I would appreciate any opinions on this. Many thanks.

Caz3121

elaine373 wrote: »

PI expected a drop but didn't really see any difference until my self employed husband put in his tax return a few weeks ago. Yesterday I received a £92.49 (weekly) drop in my tax credits. Approx 45 from child tax credits and 47 from our working tax credit.
My question is, is it sometimes better not to receive carers allowance? Because from what I can tell, it's deducted from working tax credit as well as making our overall income higher, therefore child tax is also deducted. Also, my husband will be taxed more because his overall income ( our household) is higher than if I did not receive carers.

tax credits is based on household income. Carers allowance adds an additional £3230 to your annual income so I suspect that only part of the drop is related to the carers (additional 62.10 does not cause a reduction of 92.49)
what income was the 15/16 award based on and what was the final income? what is the estimated 16/17 income?
have you been notified of any overpayment from the previous year that is being taken back or is the reduction due to your husbands income increasing?
Am unsure why you believe you receiving carers affects your husbands tax position...it is not classed as his income

Darksparkle

As caz said, your husband is taxed on his income, not his households.

If you receive carers allowance that is your income however if you don't have any other taxable income yourself then your personal allowance will cover the amount of the carers allowance.

The maximum tax credits would reduce due to carers allowance is £25 approx as tax credits reduces by 41p for every £1.

elaine373

Thank you for your replies. No I don't have any other taxable income. I may be wrongly presuming that he will be taxed for a joint amount. This is because the accountant also informed, ( even though I had already told them) the tax credit people, what our final joint amount was. It was very similar to the estimate that I had given them a few months back.

I will look into this further with the inland revenue. Also, there is no overpayment from the previous year. Thanks very much for you help.

elaine373

Caz3121 wrote: »

tax credits is based on household income. Carers allowance adds an additional £3230 to your annual income so I suspect that only part of the drop is related to the carers (additional 62.10 does not cause a reduction of 92.49)
what income was the 15/16 award based on and what was the final income? what is the estimated 16/17 income?
have you been notified of any overpayment from the previous year that is being taken back or is the reduction due to your husbands income increasing?
Am unsure why you believe you receiving carers affects your husbands tax position...it is not classed as his income

And that's the point of my concern. I am still waiting for the letter from the tax credit people but as you have said, £62.10 does not equate to £92.00. I will see what the letter says. Thanks again.

Darksparkle

elaine373 wrote: »

Thank you for your replies. No I don't have any other taxable income. I may be wrongly presuming that he will be taxed for a joint amount. This is because the accountant also informed, ( even though I had already told them) the tax credit people, what our final joint amount was. It was very similar to the estimate that I had given them a few months back.

I will look into this further with the inland revenue. Also, there is no overpayment from the previous year. Thanks very much for you help.

Tax credits - household income
Tax - individual income

What was 2014/15 and 2015/16 household income?