FINALISING TAX CREDITS BY END OF JULY THOUGH THEY ENDED LAST SEPTEMBER!

epsilon4900

Finalizing my tax credit claim by 31st July even though they ended last September.

Two questions. When they compare the figure from last year for my self employed profits with the same for this year do they take account of the fact that I have put down the figure for the whole year yet in fact my WTC stopped last September? Does this affect the final calculation of if they owe me or I owe them money?

It's not very well calibrated online when you complete it? In some places it seems to be aware of when my WTC stopped but it still seems to want to know for example the amount of savings interest ( Non Isa ) over the whole year even though that will obviously be a bigger number than the actual amount of interest I earned by September? Again though I have filled it in for the whole year do they do it pro rata and / or does it impact the final calculation?

I hope both of these questions make sense?

I am likely just to accept whatever they come back with in a few weeks but it does feel unfair not to take account of monies I earned up to when they actually stopped paying me?

Thanks.

peteuk

The question is why did it stop in September?

The reason why they take the whole years is because of the way it is calculated.  The payments you received are not “monthly” payments based on how much you earnt, it is based on an estimated yearly income and then divided by 13 payments.  So although your TC stopped in September the payments from April-September are still based on your annual income. 

If you migrated to UC then it would have been an in year end, as UC is a monthly payment based on your earnings in that assessment period.   I will assume that as youve got an end of year finalisation you’re not claiming UC.

So in theory if you earnt too much to claim TC, all the payments received could now be classed as an overpayment,  There is no pro rata with TC.  Entitlement is based on the year (April to April).  So they base your entitlment on the year not the period you claimed.  

Because they estimate the amount you earn (usually based on the previous end of year earnings) to pay you, the end of year finalisation recalculates this on your actual earning. 

NB I have used “monthly” to keep it simple.

epsilon4900

peteuk said:

The question is why did it stop in September?

The reason why they take the whole years is because of the way it is calculated.  The payments you received are not “monthly” payments based on how much you earnt, it is based on an estimated yearly income and then divided by 13 payments.  So although your TC stopped in September the payments from April-September are still based on your annual income. 

If you migrated to UC then it would have been an in year end, as UC is a monthly payment based on your earnings in that assessment period.   I will assume that as youve got an end of year finalisation you’re not claiming UC.

So in theory if you earnt too much to claim TC, all the payments received could now be classed as an overpayment,  There is no pro rata with TC.  Entitlement is based on the year (April to April).  So they base your entitlment on the year not the period you claimed.  

Because they estimate the amount you earn (usually based on the previous end of year earnings) to pay you, the end of year finalisation recalculates this on your actual earning. 

NB I have used “monthly” to keep it simple.

Thanks. It stopped in September because they wrote to me to tell me that they were stopping them and I had to apply for universal credit if I wanted to continue to get financial support? Part of the we are ending Tax Credits process? 

peteuk

So I take it you didn’t apply for UC and let your TC stop!  If you applied you would have got an in year end of TC finalisation.  That would have worked out April - Sept.  Equally you would have been afforded some level of transition protection.  So if you have £16K in capital then you could claim UC for a year and the capital would have been disregarded for the TP. 

epsilon4900

peteuk said:

So I take it you didn’t apply for UC and let your TC stop!  If you applied you would have got an in year end of TC finalisation.  That would have worked out April - Sept.  Equally you would have been afforded some level of transition protection.  So if you have £16K in capital then you could claim UC for a year and the capital would have been disregarded for the TP. 

Thanks. Yes. I did let things go. I just wasn't attracted to anything of UC at all. It seemed designed to make it as unpalatable to be on as possible. Perhaps that is a good thing perhaps not. Different points of view dependent on your politics I guess. Tax credits though complicated were more generous. Interesting how for a long time they were not seen as too generous and then eventually they became seen as exactly that. I like the pattern of work that I have and did not want to be pressured to increase my hours at this time in my life when I am seeking to slow down the amount of work I am doing not increase it. I preferred to tighten my belt and continue my retirement planning apace and so far I have not regretted that decision.

poppy12345

Tax credit are not always more generous, for some people UC pays more, it just depends on each individual circumstances. For Tax credits there was always more chance of an overpayment but with UC entitlement is based on earnings received each month, so much greater chance of no overpayments. 

epsilon4900

poppy12345 said:

Tax credit are not always more generous, for some people UC pays more, it just depends on each individual circumstances. For Tax credits there was always more chance of an overpayment but with UC entitlement is based on earnings received each month, so much greater chance of no overpayments. 

Interesting observation. For me I think I would have received the same as I had been getting for WTC BUT only for up to a year and there was no guarantee that I would not be pressured into seeking and or finding and or accepting more work in one form or other. That just didn't appeal when WTC just let me keep the 16 hours I was doing quite happily. This close to retirement I didn't fancy having to be answerable to someone in the Job Centre who may have very different ideas on what the right thing for me would be?