Childcare & Tax Credits - Please help!

BeatrixKiddo

Hi,

I would be so grateful for some advice, as I really don't know what to do and I'm so stressed out by all of this.

I work FT and so does DH. We earn about £45,000 between us, but are about £15,000 in debt, and have significant other outgoings between us (DH's maintenance etc.). We've tried cutting back on as much as we can to pay debts off quicker etc. and were struggling as it was.

I pay £600 a month childcare and am due to start a second job as well in a few months, which should bring in approx an extra £400 pm which I was counting on to pay the debts off quicker with.

We have received approx £350pm childcare tax credits for a while now, but last month we only got £220. I couldn't afford the extra so managed to make it up by selling unwanted stuff on ebay (good old ebay!). When I rang the inland revenue to query why it had suddenly gone down, they said it was because I earnt more last year (when I didn't, I earnt less in fact, as I was on maternity leave). The lady I spoke to said she would send some forms out to correct it, and we should get back on track again.

Anyway, received the forms last week and realised that they had my husband's income all wrong (£10k less than he actually earned). Now we have to sign a declaration to say it is all correct & we could be prosecuted if it's not.

I am worrying myself sick now, as we are honest people but if we tell the truth, we won't get anything and I won't be able to afford to go to work (???) and therefore pay our debts off. Also, they may think we have been overpaid all this time since my DH's pay rise and demand that we pay it back - which we certainly can't afford. If we lie, we could risk getting in serious trouble and we wouldn't feel comfortable doing.

I don't know what to do now, as the only option we can come up with is if I quit my FT job (which I really don't want to do) and just work in the evenings in September in my new job which will bring in money without childcare costs, but is not really enough for us to live on (let alone pay off debts with).

We are terrified what to do as we are up to our eyeballs in debt without this, and now its even worse. We are arguing about money so much it is affecting our relationship now, which obviously has a knock-on effect to our children.

If anyone can offer any advice I would be so grateful.

Thank you x

timnicebutdim_2

Hi, i think it might be a good idea to do a SOA (Statement of Affairs) so people can help you out with expenditures that could be reduced. This is a list of all income and expenditures per month. I'm sure many people can give you some good advice with things you may not have thought of.

As for the tax credits, be honest with them, it's unlikely they would demand any money straight back, more likely to take it off future claims (which sounds like what they may be doing already).

OrkneyStar

:T

timnicebutdim wrote: »

Hi, i think it might be a good idea to do a SOA (Statement of Affairs) so people can help you out with expenditures that could be reduced. This is a list of all income and expenditures per month. I'm sure many people can give you some good advice with things you may not have thought of.

As for the tax credits, be honest with them.

I agree on both counts.

jacksons_mum

i was overpaid by £1200 last year and they take the repayments out of this years payments, they only take what you can afford to repay.
why dont you post on the tax credits board i think there are a few people who work for tax credits on there who could help you more.
and as already said, post your soa on the debt free wanabee board, the people on there give some great advise.

Paparika

I agree you should be honest with TC, if not you could get into serious trouble and have your money suspended all together until it is sorted out and they can take months.

if they have the wrong information and you are adamant that you gave the right information, then it is down to them to find your forms (or if you did it over the phone - find that call and listen to it) then you have a right to appeal, if you were overpaid and was unaware of it then you don't pay anything back.

have you looked to see if you are entitled to childcare costs / vouchers from TC? that would also help with outgoings

surreysaver

I do not know how you are supposed to know whether you have been paid tax credits correctly when there is no explaination anywhere of how it is worked out, and the tax credit people themselves do not know half the time how it works either.

onlyroz

Don't know a lot about tax credits, but are you paying for your childcare through a childcare voucher scheme? If you're not then you really should be, because you and your partner can save the income tax on £243 a month each.

BeatrixKiddo

Hi,

Thank you for all the suggestions. I will definitely do a SOA shortly and post it on the debt-free wannabe board, as any ideas would help.

Also, I looked into the childcare vouchers scheme before I went on maternity leave, and it would help but not much (I think we would get about £60 a month).

If they took the tc's overpayments out of our future entitlements, it wouldn't be so bad but I was terrified at being hit with a bill for thousands. Anyway, like someone said, how on earth are you meant to work it all out when they can't even do it???

I didn't even know about a tax credits board, so sorry about that! But I will have a search and post on there.

Thank you so much again, I really hope we can sort it out.

Jo x

bestpud

surreysaver wrote: »

I do not know how you are supposed to know whether you have been paid tax credits correctly when there is no explaination anywhere of how it is worked out, and the tax credit people themselves do not know half the time how it works either.

It states on the awards how much they have you both down as earning and it is up to the claimant to check that thoroughly and speak up if it is incorrect!

OP - have a look at your awards for last year and see what they have your oh down as earning. If they are correct then you should definitely appeal. If they have the lower amount then it will likely come down to being your responsibility.

However it is best to tell them asap, as it will only be getting worse. They will only take a precentage, as others have said. Why not see how it pans out before making a decision about your job? It may not be as bad as you think.

You can have a play around with figures on entitledto but check on here after as it has been giving some wild estimates of late (unless they have fixed that now).

The debt free wannabe board is well worth a look as well, as said.

OrkneyStar

surreysaver wrote: »

I do not know how you are supposed to know whether you have been paid tax credits correctly when there is no explaination anywhere of how it is worked out, and the tax credit people themselves do not know half the time how it works either.

I agree with what bestpud said on this point. Also CAB can help a lot with tax credits, in that they can contact them on your behalf and also help explain how entitlements have been calculated, overpayments (best way to repay/appeals etc). The award letters have been redesgined and do look slightly better in my opinion.
Hope this does not stress you out too much,

surreysaver

bestpud wrote: »

It states on the awards how much they have you both down as earning and it is up to the claimant to check that thoroughly and speak up if it is incorrect!

OP - have a look at your awards for last year and see what they have your oh down as earning. If they are correct then you should definitely appeal. If they have the lower amount then it will likely come down to being your responsibility.

However it is best to tell them asap, as it will only be getting worse. They will only take a precentage, as others have said. Why not see how it pans out before making a decision about your job? It may not be as bad as you think.

You can have a play around with figures on entitledto but check on here after as it has been giving some wild estimates of late (unless they have fixed that now).

The debt free wannabe board is well worth a look as well, as said.

But you still have nowhere to check how the entitlements are worked out. You can provide all the correct information, check they have it correct, but with no information on how the calculation is done, you have no way of checking whether you receive the correct credits.