How Child Tax Credit is Worked Out

maturestudent1

Hi,

I am a little confused. So our income for 16/17 was 26175 and I estimated for 17/18 18000 (41 hours per week), however it is actually 19875 due to overtime. What figure would they have provisionally based the 17/18 child tax credits on? Would it have been the estimate of 18000? Am trying to work out if I have been overpaid (I am already paying back an over payment from last year)

Thanks.

Darksparkle

It would have been based on £20,500, the £18,000 you estimated plus the £2,500 they disregard for income changes.

It will now be recalculated on £22,375, the £19,875 you actually earned plus the £2,500 they disregard.

You'll have an overpayment of approx £770

Ezorqs

Darksparkle, quick query and I think this would help the OP in the future. How does one guard against these over payments? In relation to WTC/CTC?

marliepanda

Ezorqs wrote: »

Darksparkle, quick query and I think this would help the OP in the future. How does one guard against these over payments? In relation to WTC/CTC?

Over estimate rather than under estimate.

Darksparkle

Ezorqs wrote: »

Darksparkle, quick query and I think this would help the OP in the future. How does one guard against these over payments? In relation to WTC/CTC?

As said, overestimate rather than underestimate. Not always possible in some cases but if I claimed I'd always be tempted to add on another £1-2000 on top of my expected earnings just to give me a slight buffer.

Also actually check the figures throughout the year. Many people update an estimate at the start of the year and confirm the actual at the end of the year but don't ever check payslips in between.