A hypothetical situation...

chris1821_2

Good morning,

I have a quick question about working/child tax credits that I hope you lovely people may be able to help me with.

I am self employed, and based on some quick sums for my profit for this tax year which ends in a couple of weeks I am likely to be below the threshold to allow me to claim some working tax credits and child tax credits.

However my earnings will be increasing slightly from around June and so next years profits are likely to be higher and I will no longer be eligible for any benefits. My question is if I claim tax credits for the next 12 months and then inform the tax office when I submit my tax return for tax year 2018/19 next april (which will be much higher) will I then have to pay back everything they have given me for the last 12 months?

Many thanks,

Chris

Hoogle

Really not my area of knowledge but I believe tax credit awards are based on your previous years income so current claim now would be based on your 2016/2017 income next year will be 2017/2018 so if you earn to much this year then your claim next year will be decreased or not entitled to it etc.

sheramber

Tax cRedits are calculated on the annual income so if your income is higher then the estimate by more than £2500 then you will be overpaid for the year and have to pay back any overpayment.

Your initial award is estimated based on your previous year's income but is reviewed after the end of year against your actual income for that year. The first £2500 of difference is ignored and the actual award calculated on the new figure.

details here https://www.entitledto.co.uk/help/how-tax-credits-work

You can contact them after 5 April and give them a new higher estimate for the year. It may be better to over estimate and be due more money at the end of the year than be overpaid and have to pay it back.

Darksparkle

What do you mean by below the threshold to allow you to claim?