Tax credits help

cornish_donkey

Hi,

My hubby has started a better paying job and I am a carer for my dd so claim carers allowance. Our yearly gross income is more this year than last so we have a 2,500.00 disregard.

My hubby's company is putting pressure on him to do regular overtime which is great but obviously our wtc would go down. I have done lots of workings out and it looks like busting a gut with overtime is just not worth while, my calculations are working out that we would be better off money wise if he refused overtime because the more you earn the less help you get.

My question is once you are no longer entitled to wtc do HMRC start skimming of ctc with their taper system?

TIA x

calcotti

https://www.moneyadviceservice.org.uk/en/articles/child-tax-credit Says:
Child Tax Credit and income thresholds

If you’re getting Child Tax Credit and your annual household income is £16,105 or below, you’ll get the maximum amount for each Child Tax Credit element you qualify for.

This is called the income threshold. Anything you earn above this will reduce the amount of tax credits you can get.

They will be reduced by 41p for every £1 of income.

If you’re getting Working Tax Credit and Child Tax Credit, your income threshold is lower.

Your tax credits will start to reduce once you earn above £6,420.

cornish_donkey

Thanks for the reply.

Am I right in saying that you take off the 6,420.00 threshold from your annual gross income and then 41p come off each pound earned after that? so they start to reduce child tax credits the same way once they have removed all wtc. That seems so unfair when you are trying to provide and only one can work.

[Deleted User]

cornish_donkey wrote: »

Thanks for the reply.

Am I right in saying that you take off the 6,420.00 threshold from your annual gross income and then 41p come off each pound earned after that? so they start to reduce child tax credits the same way once they have removed all wtc. That seems so unfair when you are trying to provide and only one can work.

Plenty of people with children work full time. That's why tax credits provide help with childcare.

Darksparkle

cornish_donkey wrote: »

Thanks for the reply.

Am I right in saying that you take off the 6,420.00 threshold from your annual gross income and then 41p come off each pound earned after that? so they start to reduce child tax credits the same way once they have removed all wtc. That seems so unfair when you are trying to provide and only one can work.

I don't see why it is unfair? Tax credits is to top up low income, if your income goes up your tax credits goes down that seems perfectly fair. If they didn't reduce CTC due to income then everyone would be able to claim and there is no need for that.

Ignore that £16105 threshold mentioned by a previous poster, it doesn't apply in this situation.