Tax credits and savings

rbcjhub

Hi all.
I'm still in a bit of a panic as I have recieved a tax credits compliance letter, I have recently asked another question in relation to this, but forgot to ask a question.

Basically, as to my understanding (and what I had been previously advised by people) is that only savings over £6k need to be declared, so instinctively, I assume that if you have savings less than £6k you don't need to tell tax credits.

I ask because I had some cash savings (although I deposited 3 separate amounts into a bank account as and when we needed it) just over £5k last year.
Now those savings are gone, but did I need to tell the tax credits about it as I genuinely was lead to believe as it was below the threshold I didn't need to declare it?

TIA

pmlindyloo

Tax credits do not have this threshold for savings.

The only way savings affect tax credits are if the interest on the savings is more than £300 a year.

rbcjhub

Thank you for your answer.
But did I still need to tell the hmrc that I'd got the savings in the first place, irrespective that I got no interest or did I only just need to tell them when interest got over £300 per year?
I didn't get any interest as it was cash saved at home, and when it did go in an account, the money was short lived, ie spent.

pmlindyloo

I understand that you have received a letter from HMRC about your tax credits asking for information? You say it is a compliance letter?

What is the letter asking about?

Generally, you only have to declare the interest on any savings if that interest is over £300 a year. So, in your case, there would be nothing to declare.

However, it does depend on what the letter is asking?

Can you please tell us?

rbcjhub

It is asking for;
Any employment details for my wife and I between 2017/18 (of which there isn't any employment)
Details of any social security benefits we recieve (my wife gets carers and income support (with an element for me)).
They've asked for child benefit proof (which we have), my daughters full name, bank statements for the period 1st Jan to 31st of March for my wife and I (including joint accounts) and full details of any other income or benefits including investments, shares, pensions, rental income, or interest on savings recieved for the tax year ending 5th April.

The thing that concerns me is that I had cash savings that I eventually put into our current account then transferred to our savings account. But as I say, we kept "dipping" into our savings by transferring back to our joint current account and the money went on paying bills etc, so there was no chance of interest building up on it.
I no longer have the said savings account because I felt it pointless to have it as our savings are now no existent.
So now I'm worried they'll start questioning transactions.

Also there are a number of transactions between my brother and I, this is because where ever possible we will help each other if one of us is facing a shortfall in cash.
As he works full time and gets paid monthly, he often asks me if I can "sub" him for petrol or for shopping until he gets paid, as we get money weekly/fortnightly we're in a better position to help.
I spoke to an hmrc advisor who said to write a covering letter to explain where there are lots of transaction to or from certain accounts.
I have done this and done it honestly but I suffer from catastrophizing, paranoia, stress and anxiety.

Im having sleepless nights and not eating properly because I really do think I've done something wrong and I'm going to prison. I know that sounds silly, but my mind is constantly thinking the worst, I can't switch off.
When I first got the compliance letter my head went into overdrive and in my head I had myself being some master criminal, with police knocking at my door, searching the house being took to the police station in handcuffs all in a matter of hours. It was a horrible feeling. I managed to calm down, but I'm getting those thoughts again.

Sorry, I know I'm going off subject, but I'm, put simply scared that I have messed something up.

Thank you for your time and help.

rbcjhub

Hi sunny, thanks for your reply.
I'm not sure that they would know about that yet, as I've not submitted my statements at present.
Or could hmrc "look into" into our accounts (or the banks report it? Although I thought banks only report any interest earn from savings, nothing more, as to what I've read elsewhere)

poppy12345

rbcjhub wrote: »

I ask because I had some cash savings (although I deposited 3 separate amounts into a bank account as and when we needed it) just over £5k last year.

TIA

I agree that this is most likely what they want to check.

rbcjhub

Thank you for your reply.
What I would ask is how would they know about the deposit if I haven't shown them my bank statements yet?
Thanks again

rbcjhub

All, just to add, the tax compliance is in my nin only, not my wife's?!
Also, if the money was deposited last year a part from one which was Feb, why haven't they asked for last year's statements, just Jan to April this year?

rbcjhub

Sorry, Jan to March.
(would have edited post but typing on my mobile and for some reason I can't edit posts)

poppy12345

rbcjhub wrote: »

Also, if the money was deposited last year a part from one which was Feb, why haven't they asked for last year's statements, just Jan to April this year?

If you think this then why ask the question in the first place? as your question was about the savings you deposited into your bank..... We would really only be guessing what the compliance letter could be about, maybe you can ring the number on the letter and ask.