Child tax credits

Snuggles

I have just discovered that I am pregnant and I am in a state of confusion. If I decide to continue with the pregnancy, I would be a lone working parent (with a mortgage to pay) and I just don't know how I would manage with childcare costs etc.

I have been looking at the tax credits calculator on the HMRC website to try to get an idea of what I would be entitled to, but I am confused by the calculation results. It tells me what the entitilement would be, but then says this is the amount I would be entitled to between 29/12/07 and 05/04/08 (I entered the information as if the baby had just been born). So, I don't understand whether the figure given is the ANNUAL entitlement, or whether it is the total amount I would receive between 29/12 and 05/04 (ie a quarter of the annual entitlement)??? Obviously it makes a huge difference.

If it helps, my gross earnings are £20,000 per year (with no other income), and I estimate that childcare costs would be £100 per week.

I wish finances played no part in the decision I have to make, but the harsh reality is that I have to take everything into consideration.

msmicawber

Hi Snuggles and congratulations.

Tax Credits are calculated for the financial year (April to March) on your income for the previous financial year + whatever childcare costs you have or predict. If you claim within the financial year, then the calculation will only be for the remaining proportion of the current financial year.

The Working Tax Credit is made up from 4 components - basic (i.e. how much less than x amount that you earn (I think it's £25k)), lone parent element, a 30-hour element if you normally work more than 30 hours per week and a childcare element (up to max. of 75% of the childcare fees you pay).

The Child Tax Credit isn't so complicated. And don't forget you'll also get Child Benefit of £18.10 per week (which tends to be increased by a few pence each financial year).

I'm sorry I haven't given you actual figures, but hope that an explanation of the TC might help. I earn less than you, am a lone parent with two children and get by OK. When the children were younger and I paid for childcare and received the childcare element, I did struggle at times but it was mainly because I live in rented accommodation, received a top-up of housing and council tax benefits and the Council kept screwing this up. If I'd been on a higher wage and hadn't had to apply for extra benefits, then I would have managed fine, as I do now.

Good luck whatever you decide to do.

clairec79

That figure is for the rest of the tax year (so divide by 3 and you'll get a rough monthly figure).
You get an extra £10 or so a week for the first year

Snuggles

Many thanks for the replies.

The HMRC site is quoting a figure of approx £1,500. Obviously, if that's just for the remainder of the tax year, it is £500 per month, which seems like a lot. Does that sound right for a single parent earning £20,000 and paying £100 per week in childcare?

Also, is payment of tax credits in any way linked to maintenance payments? Rightly or wrongly, I don't feel that I would be in a position to press the father for maintenance. This wasn't planned and neither of us wanted a child, he has been adamant about it from the moment I met him. I know I might be legally entitled to maintenace from him, but morally, I don't feel it would be right, when I am the one choosing to have the child. I think it is a matter for him to choose whether he wants to be involved and whether he wants to contribute financially. I hope he will, but I don't believe I have the right to force him.

Thanks,
Snuggles

Zara33

Snuggles,

Tax credits are not associated with child maintenance, you say you will be going back to work so you really don't have to worry about benefits and the CSA becoming involved. Morally though it does take two people to create a child a rightly so he should pay to support his child. If he was so adamant about not wanting a child perhaps he should have covered it.

kazmeister

msmicawber wrote: »

Tax Credits are calculated for the financial year (April to March) on your income for the previous financial year + whatever childcare costs you have or predict.

Please also bear in mind that should for any reason your earnings go up within the current year, you HAVE to let them know, if not as we had to, they will claim it back from you as your entitlement would have become less. As a result of my OH doing unplanned overtime just a week before Christmas we had to pay back over £500 which dated back to what we were paid over 2 years ago :eek:

lindsaygalaxy

Just wondering where the £100 a week comes from for childcare? Im not sure what area you are in but full time nursery for a little one here s about £160 a week, less if with a childminder but then you have to pay for the milk and nappies when there etc.

https://www.entitledto.co.uk website i think works it out yearly. Im not sure what your maternity pay will be, but if it is SMP then you will have a reduced income during this time and recieve higher tax credits, but you will only get the working tax credit element when you back to work ( Or so i belive).

Snuggles

Zara33 wrote: »

Snuggles,

Tax credits are not associated with child maintenance, you say you will be going back to work so you really don't have to worry about benefits and the CSA becoming involved. Morally though it does take two people to create a child a rightly so he should pay to support his child. If he was so adamant about not wanting a child perhaps he should have covered it.

Thanks Zara. I appreciate what you are saying regarding maintenance, and I realise that my opinion on this is probably a minority one. Yes it takes two to tango etc, but I was taking contraception and did not insist that he should also take precautions. I am the one who gets to decide whether or not to have the child. If I didn't want to go through with it, but the father did, he wouldn't get a choice in the matter, he couldn't force me to have a child I don't want to have. It doesn't seem right that I should therefore be able to force him into supporting a child he doesn't want. As I said, it's probably not a popular opinion, but that's how I feel about it.

Snuggles

lindsaygalaxy wrote: »

Just wondering where the £100 a week comes from for childcare? Im not sure what area you are in but full time nursery for a little one here s about £160 a week, less if with a childminder but then you have to pay for the milk and nappies when there etc.

www.entitledto.co.uk website i think works it out yearly. Im not sure what your maternity pay will be, but if it is SMP then you will have a reduced income during this time and recieve higher tax credits, but you will only get the working tax credit element when you back to work ( Or so i belive).

The £100 a week was an estimate. I've only just discovered I am pregnant, and it's not something I've ever thought about before as I always said I would never have children (funny how different you feel as soon as you know you have a new life growing inside you), so I really have no idea how much these things costs. Sounds as though I have underestimated, obviously I need to do some proper research, but it's early days.

I will get full pay for six months while on maternity leave, so no issue there I don't think.

I will check out the website you suggest, many thanks!

ohreally

Zara33 wrote: »

Morally though it does take two people to create a child a rightly so he should pay to support his child. If he was so adamant about not wanting a child perhaps he should have covered it.

It's not his child, it's their child - or perhaps that doesn't apply to your perspective? You also fail to be cognisant that she could have insisted on his covering up....plus one could also factor in family planning or is that irrelevant and to be blamed on him also?

Oldernotwiser

Snuggles, don't get so tied up in the financial questions that you neglect to look at your other options. I find your attitude to the baby's father refreshing so I'm sure that you'll be prepared to look at other possibilities as well as having/keeping the baby.

Good luck in whatever you decide.