Help me make sense of this please!

Firey_Jack

Hi there - I'm hoping that someone can help me understand the whole tax credit thing, cos I feel like a total dimwit at the moment...

Here's the situation:

I am married and have two year old twins. My husband works full time and earns £42000. I work 14.8 hours a week and earn a net salary of £5500 a year.

I have only just applied for tax credits because I didn't realise that I was entitled to anything. (So angry with myself as I could have been claiming CTC since my babies were born...)

The application form asks for income based on the tax year from 6 April 2006 - 5 April 2007. My P60 says I earned £947.00. This is because for most of the tax year I was employed for 30 hours a week but on unpaid maternity leave.

I applied for CTC (joint claim) but did NOT claim for WTC as I now work LESS than 16 hours a week... As I work less than 16 hours I am in the process of trying to claim contribution-based JSA (although I have yet to hear if I will receive anything). I earn £462 a month for 14.8 hours a week.

Here is the thing: on the letter I got from HMRC the other day, it says I am entitled to £904 WTC and £927 CTC - which are the full amounts I believe. It also says I am claiming a qualifying benefit (income-based JSA) which I'm not and never have done. I did not give this information on the form.

I have rung the helpline and told them of the error, so I'm expecting a letter with the re-calculation of our entitlement. I've had £114 paid to me so far (a CTC and WTC payment) and there was £434 and £325 due to be paid next month. As fab as that would be, I can't believe that it's really MY money and I don't want to pay it back. Reading about overpayments on the other thread has really given me the willies!

The whole thing keeps swimming around in my head because I just cannot fathom how they work out how much to pay people.

I just don't 'get' the system at all. Will the payments I get between now and April 08 be based on what I earned in the 06/07 tax year?


Someone please explain it in terms that a five year old would understand!!

Thanks.

Firey_Jack

Just to add - I've just done the online 'Do I qualify?' thing on the HMRC site and based on the info I keyed in (which is exactly the same as what I put on my paper application) it says:

Based on the information you have entered, your [URL="javascript:DoGlossary('household')"]household[/URL] may be entitled to the following tax credits award:-[URL="javascript:DoGlossary('childtaxcredit')"]Child Tax Credit[/URL]£102.81Childcare element of Working Tax Credit£0.00Sub total£102.81[URL="javascript:DoGlossary('workingtaxcredit')"]Working Tax Credit[/URL] (less the childcare element of Working Tax Credit)£0.00Note: The childcare element of Working Tax Credit will always be paid direct to the person who is mainly responsible for caring for the child or children, alongside payments of Child Tax Credit.Total£102.81This is based on your [URL="javascript:DoGlossary('householdincome')"]household income[/URL] of £42947.00.This is the amount your household may be entitled to from 28/01/2008 until 05/04/2008. This result is only an estimate and is based on the information provided assuming you make the claim on 28/01/2008. This means the amount shown may not be your entitlement for the full year.

The amount may change when your claim is processed and in certain circumstances may be paid from an earlier date (up to a maximum of 3 months) where you (or your partner if it is a joint claim) satisfied the requirements for entitlement.

Okay - so that is a LOT less than the £1800 WTC and CTC that it said on the letter...

Another question - assuming I'm entitled to £102.81 in CTC - is this a year? a month?

This is doing my nut in - I'm not even sure it's gonna be worth it.

bonnie_2

You would deffo not get wtc as your hubby earns well over the limit. you should only be getting about £20 a week ctc.

flea72

the figure you got off the online calculator is youre entitlement for the remainder of this tax year, so roughly 2m worth

you havent missed out on claiming anything. if you applied for tax credits they automatically assess you for both elements - ie WTC and CTC

If you are in the process of trying to claim JSA then yes their form is correct. whether your claim has been decided yet doesnt matter. Im a bit unsure how you can claim unemployment benefit if you are working, but you are obviously under the assumption that its possible?

with your family income you should be getting the basic entitlement, which is about £48 a month, so based on that the £102.81 looks right.

the main confusion here, is you have to claim using the figures from your income for the previous year. in your case, you werent working, so your income was alot less. once your award has been granted, you then have to let them know of any changes in circumstances, ie you are now working again, and what your income will be. you should then receive a revised award notice, based on what you actual income was for this tax year - making sense? So your income on your current award notice should say £947 (as per your P60), but you then have to ring and amend it to say, well actually this year i have now earnt £5500. As its so late in the tax year, they may not do a revised payment, but just reduce next years award, to cover the overpayment this year

Just one query, do they have your husbands income right on the award notice you have. its just that the figure they have quoted you, looks like they have only taken into account your income. no-one with an income of £42k would get WTC, only the basic CTC

Flea