Tax Credits migration to Universal Credit

FIREDreamer

What date should we migrate to lock in the tax year 2023/4 as being fully Tax Credits - is it 6th April?

We need to migrate by 20 April. How do tax credits work for 6/4 to 20/4 if we migrate on 20 April as in this period we have no income as salary and pension are paid after the 20th of the month? Do they use full year estimate x 14/365 as notional income for this period?

EDIT: Given the way that pension income is deducted pound for pound from universal credit as opposed to being treated the same as salary under tax credits I suspect our universal credit award will be zero so I think we will just let tax credits lapse on 20 April and forgo the intrusive universal credit system.

peteuk

So your TC will cease on 20 April (in theory) should you choose not to claim UC.

UC credit application is not as intrusive as you may think so even if you get a nil award, you may get a transitional period you wont know until you apply. 

The day you apply becomes the start of your assessment period and that is a months period.  So if you start 06 April your assessment period is 06 Apr to 05 May and payment date will be 5-7 days afterwards. 

The payment is based on your actual income for the assessment period. Which is automatically informed to them unless you’re self employed. 

If you are paid every four weeks, there is a month where you receive two wages in an assessment period which will significantly reduce any payment due.

You could use a calculator to work out how much UC you can claim.

Yamor

FIREDreamer said:

What date should we migrate to lock in the tax year 2023/4 as being fully Tax Credits - is it 6th April?

We need to migrate by 20 April. How do tax credits work for 6/4 to 20/4 if we migrate on 20 April as in this period we have no income as salary and pension are paid after the 20th of the month? Do they use full year estimate x 14/365 as notional income for this period?

EDIT: Given the way that pension income is deducted pound for pound from universal credit as opposed to being treated the same as salary under tax credits I suspect our universal credit award will be zero so I think we will just let tax credits lapse on 20 April and forgo the intrusive universal credit system.

1. There is no real reason to "lock in" the 23/24 tax year as fully tax credits, but yes, a UC claim on 6th April would ensure that that is the case.

2. If you claim UC on 20th April, and no income was received between 6th April and 19th April, then your tax credits will be calculated on NIL income. The fact that you had 'earned' money in that period is not relevant, as it depends when the money is paid.
However, this is only the case if you actually make a UC claim. If you let your tax credits terminate without making a claim for UC, then they will only (on current rules) finalise your tax credits after the end of the 24/25 tax year, and they will then take your income for the entire tax year, pro-rated down for the 14 days of entitlement.

3. Due to transitional protection, you absolutely would get some UC. I would advise making your claim on 8th April, or afterwards. Not before.