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Why can't I change my tax credit claim (furlough)

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Why can't I change my tax credit claim (furlough)

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n1guyn1guy Forumite
439 posts
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So took a bit of a paycut due to this furlough, my employer didn't get the he has to pay 20% part.  So I contacted tax credits to inform them they said they can't change it until new tax year, didn't give me a reason why.

Replies

  • PetriixPetriix Forumite
    58 posts
    Third Anniversary 10 Posts
    Tax credits are based on your earnings for the whole year. Because it's so close to the end of tax year, any drop in income will only have a tiny effect on your entitlement this tax year.

    After 6 April, your claim for 20/21 will be based on your updated earnings. It is possible that they will attempt to predict the duration of the reduction otherwise you will likely accrue an overpayment as, when your income returns to normal, your overall entitlement will reduce again. Don't worry, it will all work out in the end.

    Don't forget to check your entitlement to council tax reduction while your income is low.
  • calcotticalcotti Forumite
    6.3K posts
    Tenth Anniversary 1,000 Posts Name Dropper
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    Tax Credits are worked out on an annual basis. The current year is nearly finished so any change will depend on your estimated income for next year and be applicable to that year. Although your income for this current year may have dropped, given the timing, it is unlikely to have been by £2,500 or more and therefore will not affect this year’s entitlement. When you do your annual renewal if there’s has been an underpayment you will get it then.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • sherambersheramber Forumite
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    n1guy said:
    So took a bit of a paycut due to this furlough, my employer didn't get the he has to pay 20% part.  So I contacted tax credits to inform them they said they can't change it until new tax year, didn't give me a reason why.
    Your employer doesn't have to pay the extra 20%. He can do so if he wants to but if he is not brining in any money it is unlikely he will have any money to  pay it.
  • calcotticalcotti Forumite
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    sheramber said:
    Your employer doesn't have to pay the extra 20%. He can do so if he wants to but if he is not brining in any money it is unlikely he will have any money to  pay it.
    It depends on the contract of employment - but I think many employment terms are likely to be broken over the next few months. The reality is, as sheramber says, if the employer can’t afford it they won’t make up the difference. The alternative is to make you redundant (although that, of course, might incur redundancy costs).
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • GalloglassGalloglass Forumite
    368 posts
    100 Posts Name Dropper Photogenic
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    but I think many employment terms are likely to be broken over the next few months.
    Your contractual terms apply so they should not be cutting your wages. To remedy this, you should ask them to reconsider as it would be unlawful deduction from wages. As these are contracts, there is the principle of "deemed acceptance". If you do not complain and draw the breach of contract to the employer's attention, then you will be said (later) to have accepted this. 

    In the real world though it will come down to how strong the relationship is between you and your employer. And how easily they can replace your skills when this blows over. 999 times people don't bother with [any] contracts or have to refer to the terms within, but when it does go wrong, you need to be able to enforce your rights or go without them.
    Money Advice during Covid from Money Advice Service here
    Benefits Calculator here. Tax Credits (WTC/CTC) will be removed if you apply for UC. Take care. 
    Debt - Post up your Statement of Affairs (SOA). Online form here
    Employment contract issues. Ask ACAS here 
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