tax credit overpayments new report published

pepsifurball

Question: All the Tax credit award notices I have received from the Inland Revenue contain the correct information regarding salary, children, hours worked etc. so how can I have been overpaid by nearly 5000 pounds?
Also I filled in an appeals form in November after being told I had 30 days to appeal and since that time I have heard nothing! I had to collect my evidence within 30 days and yet they have not sorted it out 5 months later.

DazzerG

pepsifurball wrote:

Question: All the Tax credit award notices I have received from the Inland Revenue contain the correct information regarding salary, children, hours worked etc. so how can I have been overpaid by nearly 5000 pounds?
Also I filled in an appeals form in November after being told I had 30 days to appeal and since that time I have heard nothing! I had to collect my evidence within 30 days and yet they have not sorted it out 5 months later.

There could be several reasons why this is the case, contact the Helpline and ask for an explaination.

Dalkirst

donnalove wrote:

they are basically limits
if you go below £9000 you would be entitled to more credits
if you go above £12500 you would be entitled to less credits
but they wont make it up to that level

So as we are under the upper level of letting them know does that mean we will not have been over paid at least so will be ok in not having to pay anything back?
As long as we don't owe them that's ok.

donnalove

yep as long as your income is below the upper limit you won't occur an overpayment.

Dalkirst

That's good to hear thanks Donna:)

Dalkirst

Can i just ask something along the same lines on this.
With the new tax year now we will get the £12500 like i said earlier replaced with £25000 correct?
Does this mean that as long as my IB and my partners work doesn't go over £25000 and bear in mind it was only £12500 whatever before and this isn't likely to happen we won't have to pay anything back?
So my partner could work more hours and get more pay as this tax year that's just finished we had to make sure she didn't so as not to go over that £12500 mark.

Does that make sense?

donnalove

to be quiet honest i'm not clued up on this new £25000 threshold, so hopefuly cis or someone could answer.

DazzerG

The new £25000 threshold works in exactly the same way as the old £2500 rate.

Unless your income for 06/07 is £25000 more than 05/06, your entitlement for 06/07 will be based on your final 05/06 joint income (£12500?).

eg;

04/05 income £11000
05/06 income £12500, award for 05/06 based on £11000 (use 04/05 income as 05/06 is less than £2500 more)
06/07 income £20000, award for 06/07 based on £12500 (use 05/06 income as 06/07 is less than £25000 more).
07/08 award would then been based on 06/07 income of £20000.

DazzerG

Dalkirst wrote:

as this tax year that's just finished we had to make sure she didn't so as not to go over that £12500 mark?

Why did you feel that you had to restrict your partners earning capacity in this way?

The reduction in your Tax Credits would've been less than the money she could have earned. Tax Credits reduce at a rate of 37p in every pound earned.

CIS

I think therein lies one of the problems of tax credits, people dont always realise that they can be better off earning and reducing the level of tax credits than restricting the hours they work/the wage they earn.

Even with tax and NI deducted, your still coming away with around 40p or so in the £, after the tax credit reduction.

It can be a bad mindset to get yourself in to.