Do non-dependants affect child tax credits?

Sellurgranny

Hello, just wondering if anyone can clarify this?

My DD who is currently in final year of degree will possibly come back to live at home and work.

I currently receive WTC and CTC for 2 other DDs (1 of which will be going off to Uni in Sept) so by time she comes home I'll have 1 DD dependant.

I know my CTC will reduce when she goes to Uni but will I be further affected by the eldest coming home and earning? I will need to charge her rent which probably won't be much.

I've tried the online calculators but they dont give me a very clear picture and so I am left wondering how much worse off I'll be in September.

I currently work f/t but term time so may have to consider straight f/t to cover any short fall.

Anyone else had a similar scenario they could share?

Thanks

Darksparkle

As shown from the calculators a child's income isn't included, only yours and your partners (if you have one).

I assume you wouldn't charge rent over the rent a room scheme allowance - https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

Sellurgranny

Thank you Darksparkle, and no it will be nominal as she wants to save up to go to Dental School. I just didnt want to find myself even worse off than I already am.

amigo123

Apologies for bringing up an old thread, but I feel this is similar to my situation and would be grateful if someone can help.

My current situation is that I'm getting working tax credits for low-income+hours and child tax credits for my 2 kids - both are currently at school. But come September, one is about to go to university and the other is going to start full-time employment. They both plan to live at home.

My partner is currently out of work due to a serious injury, so she won't be working for at least 12-14 months.

Can you please advise how this change would affect the working & child tax credits?

Thank you.

Nannytone

Child tax credit and child benefit would stop completely and working tax credit would be dependent on the number of hours you work/B]

amigo123

Thanks for your quick reply Nannytone.

I know I should be grateful that the kids are getting on with their lives and I am really happy and proud of them. But being honest it's going to get very tough financially to make ends meet. I'm worried about losing the house.

One of the things the kids suggested was that rather than them move out, they would prefer to pay a small contribution of rent for a room each to help towards the cost of our mortgage, which would help and would be mutually financially beneficial to them. But if we made such an arrangement, would this firstly be allowed and are there any ways of saving on tax? How would it affect us?

Darksparkle

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

amigo123

Thanks Darksparkle. Sorry if this sounds a bit dumb, but how would that help increase the income?

poppy12345

They could both pay a contribution towards the household bills. As one will be working and the other in uni, who could also get a part time job too. Most students have no option but to work alongside uni these days. It would cost them considerably more if they move to a place of their own.

xylophone

are there any ways of saving on tax?

Which tax?

how would that help increase the income?

The offspring pay enough between them to more than cover the benefits you are losing?

The university student will have student finance and may be able to get part time work during term time/vacations and the sibling will have a salary.

It is perfectly fair that they should make a realistic contribution for their board and lodging.

Are you able to increase your hours?

Darksparkle

amigo123 wrote: »

Thanks Darksparkle. Sorry if this sounds a bit dumb, but how would that help increase the income?

Because they'd pay you rent/dig money and if within the limit of the rent a room scheme you wouldn't pay tax on it.