Tax Credits Tribunal Tomorrow.

chickenpie81

Hi all,

After some last minute advice.

Im due to go to tribunal tomorrow to dispute reduction in tax credits.

I was receiving around £100 per week up until June 2017, with this amount being calculated on previous tax years earnings (2015-2016), in June I changed jobs (to a job with lower wages), and HMRC decided my award should now be calculated on this years income.

My earnings in 2015-2016 were around £10,500 (this should have been £18,000 but had two long term periods of sick), this year they are to be around £14,500.

My argument is that all I did was change jobs and this meant a change in the tax year to calculate TC award. Had I have stayed in my old job I would have received £100 per week till March 2018.

They have stated that they are within the law which states;
if the current year income is more than £2,500 higher than the previous year income the income used will be the current year income minus £2,500.

However this normally only applies come the end of the tax year and time for renewals. My award has always always been calculated based on the previous tax years earnings.

Any advice gratefully received.

bigbill

They did you a favour as you would have had a massive overpayment after April if they had left you on £100 weekly until then, surely?

chickenpie81

Not as far as im aware. Usually they base tax credit award on previous years earnings. So, it wouldnt lead to an overpayment. Just would mean less/no tax credits the following year.

Tax credits informed me that had I stayed in my previous job I would have received £100 a week no problems, no overpayment!

Icequeen99

chickenpie81 wrote: »

Not as far as im aware. Usually they base tax credit award on previous years earnings. So, it wouldnt lead to an overpayment. Just would mean less/no tax credits the following year.

Tax credits informed me that had I stayed in my previous job I would have received £100 a week no problems, no overpayment!

That is not correct.

Tax credits are initially based on previous year income - but they are always finalised based on a comparison between previous year and current year. From that comparison they will either finalise using previous year or current year depending on the difference between the two figures (applying the disregard rule you mentioned above).

So you would have had an overpayment.

It is possible your awards have always been based on previous year income, but that is probably because of your income pattern not because that is the rule.

Are you sure you mean 2015/16 income? Your 2017/18 award (current year) should have initially been based on 2016/17 income not 2015/16.

This guide explains the disregards https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/understanding-the-disregard/

Section 7 of the Tax Credits Act is the legal reference you need to look at.

IQ