First time tax credits claimant

cifpower

I rang Tax Credits last week to see if I was eligible as I am starting work shortly. He asked for my income for the last tax year but I have yet to receive my P60 from Incapacity Benefits. The year before I received £5500 to upped it to £6000 for last year. I also get DLA (MRC and LRM).

I was told I would get £94 a week which seems like an awful lot for just me and no kids. He also asked me to ring in again when I receive my award letter to tell them the income of my new job. Why would I have to do that?

hotblu

Hello cifpower,

Your entitlement calculation seems correct. WTC will be based on your income for last tax year (07/08) which you estimated at £6000 (IB), due to this being a low income you will recieve a higher rate of WTC. Also, what makes your entitlment a higher rate is that you are recieving DLA which means you get the 'disability element' of wtc, which again increases your award. The reason you have been told to callback once you recieve your award notice to re estimate your income is so that the following tax year you recieve the correct amount. The disregard for TC is £25,000, which means you can earn what you earnt last year (£6000), plus a further £25,000 in the cy and your tax credits wouldn't change- but would affect the following year. I hope this helps and I haven't confused you too much with the £25,000 disregard.

Regards

Hotblu

cifpower

Thank you. That makes a lot of sense.