Maternity leave and tax credits

matthewking26

Hi,
Not sure if this has been covered elsewhere. Apologies if so.
I was on the phone to the tax credit people discussing changes in circumstances.
If you are on maternity leave, when estimating income you disregard the first £100 per week of maternity pay.
E.g My partner gets £480 per month maternity pay. Therefore they disregard £400 of that.
Meaning her estimated income from last year virtually halved. Might make a difference to people.
The lady on the phone brought it up, I didn't know about it. She said "not many people do".

[Deleted User]

This was covered on here last week. It is true, as long as you are receiving maternity pay you are still classed as working and when declaring your income you can deduct the first £100 p/w of maternity pay (up to 26 or 39 weeks dependant on how long your leave is).

india

Hi! I'm just at the end of my maternity leave. I went on maternity leave in April 2007.

My work paid me £9,000 in total for the year smp and enhanced maternity pay. Does that mean when filling in the annual review pack and putting in my figure from last year, I can deduct £100.00 a week of the £9,000? or do I give them the £9,000 figure?

[Deleted User]

India, did you take the 39 weeks leave? If so you can deduct £3900.
If you took the 26 weeks you would deduct £2600.

machairs

I'm just about to go on Maternity Leave (20/4). Do I adjust my income to reflect this NEXT financial year or this? I'm thinking it is NEXT but would like clarification. I also didn't know it was increased from 26 to 39 so that's brilliant news!

[Deleted User]

My advice is to wait until the end of the year to declare the reduction in income.
If you lower your estimated income you dont have the £25k income disregard. You are allowed to earn £25k more than you did in the previous year without causing an overpayment, but if you lower your estimated income you need to stick to this income level. If you go above your lowered estimate you will be overpaid by 39p for every £1 you earn.
If you wait until the end of the year and declare your actual figures as being lower you will be paid the underpayment of tax credits you are owed in a single lump sum.

india

subsoniccoyote wrote: »

India, did you take the 39 weeks leave? If so you can deduct £3900.
If you took the 26 weeks you would deduct £2600.

39 weeks. Thank you

lucysmumwork

Yes listen to subsoniccoyote there seems to be loads of confusion about this and you wouldnt want to accidentally tell them you earnt less as you would only have the wrong assessment made and have to pay it back.
I too am going on maternity leave very soon but will just tell TC at the end of the year what it says on my P60, that shows your taxable income including what youi earnt from your employer AND what you got on benefits. TC will work out the right figure deducting the £100 per week anyway. I was last on maternity leave in 2005 and TC automatically did this for me, its nothing new.
Personally I dont see why they should include ANY of your maternity benefit as income, it is a benefit after all, and the extra £17 odd a week we get shouldnt be counted.

[Deleted User]

TCO do not automatically work out your deductions from income, you may have had an adviser like myself who asks if there has been any maternity pay that can be reduced from the taxable income on P60 and also make those who have made a loss from self employment aware that they can deduct the loss they made from their partners PAYE earnings.

india

I just called tax credits as my maternity leave has ended and I'm returning to work today :eek:

The advisor told me my annual review pack would be there soon and IO could disregard the 1st £100 for 26 weeks. I advised I was on maternity leave for 52 weeks and on smp for 39 weeks. He said it didn't matter.

I could only disreagard 26 weeks income. Has anyone else been told this or have I been misinformed?

mookie

So is it 26 weeks or 39?

I did not know about this, I was paid mat pay up to feb this year, so although my p60 will give x amount do i deduct £100 per week for mat leave weeks on my declaration even though my P60 will give a higher figure of earnings? Also how does it affect how I declare my predicted earnings for 2008-2009 as I have given up work now to look after my daughter so my earnings for this year will be nil. TC know this and have adjusted my payments already over the phone. Does the declaration give sections for last years actual earnings and a this years predicted earnings?